Moody's Puts Amsurg (AMSG) on Watch for Downgrade

Moody's Investors Services placed the Ba3 Corporate Family Rating and Ba3-PD Probability of Default Rating of AmSurg Corp. ("AmSurg") under review for downgrade, following the company's announcement on May 29, 2014 that it has entered into an agreement to acquire Sheridan Holdings, Inc. ("Sheridan") in a transaction valued at $2.35 billion.

The proposed acquisition, which has been approved by the respective boards of AmSurg and Sheridan is expected to be funded, though the issuance of $1.7 billion of new debt and $615 million of common equity. The rationale for the review for downgrade is the high pro forma leverage that will result from the proposed acquisition and the shift it represents to a much more aggressive acquisition strategy. We currently expect that closing leverage will be between 5.7 and 6.2 times debt to EBITDA, which will likely push AmSurg's leverage above our trigger to maintain the current Ba3 rating.

Moody's review will focus on the expected performance of the combined entities, the proposed capital structure and strategy for deleveraging, the timing and magnitude of synergies realized, as well as the combined organization's free cash flow capabilities and liquidity.

Ratings placed under review for downgrade:

AmSurg Corp.

Corporate Family rating at Ba3;

Probability of Default Rating at Ba3-PD;

$250 million senior unsecured notes due 2020 at Ba3 (LGD 3, 49%)

The principal methodology used in this rating was the Global Healthcare Service Providers published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

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