Standard & Poors rates Genesis Care’s near-$1bn debt raising at B plus

Standard and Poors has ascribed a B plus rating to Genesis Care as it moves to raise almost $1 billion worth of debt.

S&P said the privately owned Australian cancer care provider would have a loan and credit facility rated B plus with a stable outlook.

The company derives most of its revenue from Australia, where Genesis Care benefits from limited private-sector competition, high barriers to entry and a favourable healthcare payment and funding regime, S&P said.

“Genesis Care’s relatively small scale compared with peers’ limited product diversity, high adjusted leverage and growth strategy that limits its free cash generation constrain the rating.”

S&P said that the stable outlook reflected its view that Genesis Care would maintain its leading niche position, particularly in Australia, while expanding overseas.

Genesis Care is raising $875m through the term loan B market and $100m through a revolving credit facility to be issued by Genesis Specialist Care Finance in the United Kingdom.

KKR offloaded its stake of more than 40 per cent in Genesis­Care to China Resources about two years ago, with the company now 55 per cent owned by Macquarie Group, doctors and Genesis Care management, and the remainder by China Resources.