Moody’s rates Quintiles IMS loan Ba1

Moody's Investors Service said it assigned a Ba1 rating to the proposed $750 million senior secured term loan B due 2025 of Quintiles IMS Inc.

The company will use the proceeds to repay borrowings under its revolver and for general corporate purposes.

Moody's affirmed Quintiles IMS' existing ratings, including the Ba2 corporate family rating, Ba2-PD probability of default rating and SGL-1 speculative grade liquidity rating.

The outlook was revised to negative from stable.

Despite good operating performance and progress on its post-merger integration, the change in outlook to negative reflects Moody's said its concern regarding Quintiles IMS' higher leverage due to aggressive share repurchases.

In the agency’s view, debt/EBITDA will remain elevated above 4.5 times until the end of 2018 allowing minimal cushion in the rating to withstand much additional debt-funded share repurchases or business shortfalls.

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