Rating Action: Moody's affirms AMN's Ba2 CFR, outlook changed to stable from negativeGlobal Credit Research - 08 Mar 2021New York, March 08, 2021 -- Moody's Investors Service ("Moody's") affirmed AMN Healthcare, Inc.'s (AMN) Ba2 Corporate Family Rating (CFR), Ba2-PD Probability of Default Rating and Ba3 ratings on the company's senior unsecured notes. At the same time, Moody's changed the outlook to stable from negative. The company's Speculative Grade Liquidity Rating of SGL-1 is unchanged.The outlook change to stable from negative reflects the company's resilience during the coronavirus pandemic and increasing contribution from the more profitable technology and workforce solutions business.The affirmation of Ba2 CFR reflects Moody's expectations that the company's business volumes will recover fully this year after experiencing declines in 2020 due to coronavirus pandemic. The rating affirmation also reflects Moody's view that the company's debt/EBITDA will remain below 3.5x in 2021 despite resuming acquisition activity and share buybacks. The company's SGL-1 reflects a very good liquidity profile over the next 12-18 months with sustained positive free cash flow and access to a largely undrawn $400 million revolving credit facility.Ratings affirmed:AMN Healthcare, Inc.Corporate Family Rating at Ba2Probability of Default Rating at Ba2-PD$350 million senior unsecured notes due 2029, Ba3 (LGD4 from LGD5)$500 million senior unsecured notes due 2027 at Ba3 (LGD4 from LGD5)Outlook actionAMN Healthcare, Inc.Outlook changed to stable from negativeRATINGS RATIONALEAMN Healthcare's Ba2 CFR reflects the company's leading market position in the temporary healthcare staffing industry and a very good liquidity profile. The rating also reflects Moody's expectations that the company will maintain moderate leverage with debt/EBITDA in 3.0-3.5 times range after considering acquisitions and share buybacks. Despite the disruption of demand in deferrable procedures and emergency department volumes, the company has benefited from an increase in temporary staffing demand due to coronavirus pandemic. The company's recent acquisitions, including that of Stratus Video Holding Company (Stratus) in early 2020, have improved AMN's business diversification and will contribute to reducing its vulnerability to the cyclical nature of the nurse and allied solutions business. The company's nurse and allied solutions business still accounts for 71% of the company's revenue, but concentration in this business has reduced in recent years. Further, we expect that the company will continue its expansion through acquisitions which may result in a temporary increase in leverage from time to time.AMN's ratings are supported by the company's very good liquidity reflected by its Speculative Grade Rating of SGL-1 rating. The SGL-1 rating is supported by an expectation of positive free cash flow in the next 12 months, availability of $29 million in cash, and access to approximately $378 million under its $400 million revolver as of 12/31/2020.Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. In terms of governance risk, as a provider of clinical labor solutions, the company is exposed to reputational and compliance risks if the traveling staff is involved in malpractice or fraud. As a publicly traded company, AMN's transparency, disclosures, accountability and compliance are likely to be better than its private equity-owned peers. The environmental component of ESG is not material to the company's credit ratings.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSThe ratings could be upgraded if the company increases its scale and diversification without employing excessive financial or integration risks. Balanced growth through organic business expansion and acquisitions while sustaining Debt/EBITDA below 3.0 times could support upward rating momentum.The ratings could be downgraded if Moody's expects AMN's debt/EBITDA to exceed above 3.5 times due to a shift to a more aggressive acquisition strategy or financial policy. Furthermore, a weakening of liquidity or sustained decline in free cash flow could also result in a downgrade.AMN is the largest provider of workforce solutions and staffing services to healthcare facilities in the United States. The company's services include managed services programs, vendor management systems, recruitment process outsourcing and consulting services. The company's nurse and allied solutions segment accounted for 71% of revenue in fiscal 2020, the physician and leadership solutions segment accounted for 19.5% of revenue and the technology and workforce solutions segment accounted for 9.5% of revenue. The company is publicly traded, and its revenues exceed $2.3 billion.The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1037985. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. 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Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Kailash Chhaya, CFA Vice President - Senior Analyst Corporate Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. 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