Surgery Partners Inc. Ratings Placed On CreditWatch Negative On Liquidity Concerns Related To The Coronavirus Pandemic

  • We expect the demand for elective surgical procedures to decline severely amid the coronavirus pandemic, which will significantly reduce Surgery Partners Inc.'s revenue and EBITDA. Therefore, we expect the company's discretionary cash flow deficit to widen in 2020 and further weaken its liquidity.
  • We are placing all of our ratings on Surgery Partners, including our 'B-' issuer credit rating, on CreditWatch with negative implications.
  • The CreditWatch reflects that we could lower our ratings on the company and its debt if we believe the reduced demand and adverse effects on its financial performance stemming from the coronavirus pandemic will continue for longer than we currently anticipate, further weakening its liquidity.
NEW YORK (S&P Global Ratings) March 25, 2020--S&P Global Ratings today took the rating actions listed above.
The CreditWatch placement reflects our view that the coronavirus pandemic will significantly reduce Surgery Partners' revenue, EBITDA, and cash flow in 2020 relative to our prior base-case assumptions due to the rapid decline in demand for elective surgical procedures. The U.S. Surgeon General and the American College of Surgeons has recommended that all elective surgical procedures be postponed to conserve much-needed supplies and safety equipment and limit the spread of the coronavirus. Outpatient surgical centers may benefit from the shift of inpatient surgical procedures to outpatient settings, though the degree of this benefit is uncertain.
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