Rating Action Overview
- Genesis Care Pty Ltd. (GenesisCare) has entered Chapter 11 bankruptcy in the U.S. to complete a restructuring process that should reduce debt and improve its liquidity position.
- The Australia-based group has secured US$200 million in a debtor-in-possession financing facility of new money from existing lenders to assist the company with immediate near-term liquidity requirements.
- We lowered our issuer credit rating on GenesisCare to 'D' from 'CCC-'. At the same time, we lowered our long-term issue ratings on the senior secured term loans the company guarantees to 'D' from 'CCC-'.
Rating Action Rationale
The downgrade follows GenesisCare's Chapter 11 bankruptcy filing in the U.S. The company said it has secured a US$200 million debtor-in-possession financing facility from existing lenders, which should help support the group's business operations while it undertakes a proposed financial restructuring and reorganization of the business.
GenesisCare expects to emerge from bankruptcy with a more simplified corporate structure. We believe the restructuring will simplify the corporate structure. This includes the likely separation of the U.S. business from its businesses in Australia and Europe.
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Genesis Specialist Care Finance UK Ltd.
GenesisCare USA Group Holdings Inc.
|Downgraded; CreditWatch/Outlook Action|
Genesis Care Pty Ltd.
|Issuer Credit Rating||D/--||CCC-/Negative/--|
Genesis Specialist Care Finance UK Ltd.
|AUD100 mil fltg rate Multicurrency Revolver-1 bank ln due 10/23/2024||D||CCC-|
|AUD227 mil fltg rate Term B-1 bank ln due 10/23/2025||D||CCC-|
|EUR400 mil fltg rate Term B-2 bank ln due 10/31/2025||D||CCC-|
GenesisCare USA Group Holdings Inc.
|AUD150 mil fltg rate Term B-3 bank ln due 03/19/2027||D||CCC-|
|EUR507.46 mil fltg rate Term B-4 bank ln due 03/19/2027||D||CCC-|
|US$350 mil fltg rate Term B-5 bank ln due 03/19/2027||D||CCC-|
S&P Global Ratings Australia Pty Ltd holds Australian financial services license number 337565 under the Corporations Act 2001. S&P Global Ratings' credit ratings and related research are not intended for and must not be distributed to any person in Australia other than a wholesale client (as defined in Chapter 7 of the Corporations Act).
Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.
|Primary Credit Analyst:||Tristan Ong, Melbourne +61 3 9631 2176;|
|Secondary Contact:||Craig W Parker, Melbourne + 61 3 9631 2073;|
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