Moody's changes inVentiv to stable

Moody's Investors Service said it changed inVentiv Health, Inc.’s outlook to stable from negative and affirmed the corporate family rating at Caa1, probability of default rating at Caa1-PD, first-lien senior secured term loans and notes at B2 (LGD2), junior-lien PIK toggle notes at Caa2 (LGD5), senior notes at Caa3 (LGD6) and speculative grade liquidity rating at SGL-3.

The agency said the stabilization of the outlook reflects several consecutive quarters of year-over-year revenue and earnings growth and Moody's view that continued growth should be supported by favorable industry tailwinds.

Moody’s said the Caa1 rating reflects inVentiv's very high leverage, history of negative free cash flow and significant interest burden, which will make a default event likely if the company does not significantly improve its EBITDA performance well ahead of 2018, when all of its debt matures. The ratio of adjusted debt to EBITDA was roughly 10 times for the 12 months ended March 31.

The rating is supported by positive trends in the industry that could aid EBITDA growth for inVentiv, the company's significant size and diversity of service offerings and its adequate liquidity over the next 12 months, the agency said.

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