Moody's rates Medpace, loan B2

Moody's Investors Service said it assigned first-time ratings to Medpace, Inc., including a B2 corporate family rating and a B3 probability of default rating, along with a B2 (LGD 3, 33%) rating on its proposed senior secured credit facility, including a $285 million term loan due 2017 and a $50 million revolver due 2016.

The proceeds from the term loan, along with about $200 million of new common equity, will be used to finance CCMP Capital's purchase of an 80% ownership stake in Medpace, Moody's said.

Medpace's management will remain a minority investor in the company, the agency said.

The outlook is stable.

The ratings reflect the company's limited size, both in absolute terms and relative to significantly larger competitors, Moody's said, as well as the debt burden that is being incurred as a result of the company's leveraged buyout.

The ratings also are constrained by risks inherent in the highly competitive CRO industry, the agency said.

Over time, Moody's said it believes pharmaceutical companies will increasingly look to work with fewer contract service providers.

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