Bangkok--29 Jul--Standard & Poor's
Standard & Poor's Rating Services said today that it revised its recovery rating on San Diego, Calif.-based health care staffing provider AMN Healthcare Inc.'s $40 million second-lien senior secured term loan due 2016 to '3' from '4'. We now expect lenders to have meaningful (50% to 70%) recovery of principal and interest in the event of a payment default. The recovery prospects for second-lien lenders improved because of the aggressive amortization of the first-lien debt, in spite of the company increasing its first-lien revolver to $50 million from $40 million. Another factor we considered in revising the recovery rating was the postponement of our simulated default year to 2014 from 2013.
The rating on AMN Healthcare Inc.--a subsidiary of AMN Healthcare Services Inc.--reflects a weak business risk profile, which its operating concentration in the very competitive and cyclical health care staffing industry demonstrates. Moreover, the addition of $118 million of debt to fund the Nursefinders acquisition at the end of 2010, weakened the company's financial risk profile, which Standard & Poor's characterizes as aggressive. As of March 31, 2011, annualized adjusted debt leverage was 4.5x, but could decline to around 4.0x by the end of 2011, if the company achieves at least 5% pro forma revenue growth and margins remain stable.
For the latest complete rating rationale, see Standard & Poor's research report on AMN, published May 31, 2011. For the complete recovery analysis, see the recovery report on AMN, to be published following this report.
RELATED CRITERIA AND RESEARCH
2008 Corporate Criteria: Rating Each Issue, April 15, 2008
RATINGS LIST
AMN Healthcare Inc.
Corporate Credit Rating B+/Stable/--
Recovery Rating Revised
To From
$40 mil. second-lien term loan B+ B+
Recovery rating 3 4
Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Ola Fadahunsi, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Rivka Gertzulin, New York (1) 212-438-1201
Thomas L Mowat, New York (1) 212-438-1588