S&P rates Quintiles loans BB-, B

Standard & Poor's said it assigned a BB- bank loan rating with a recovery rating of 3 to Quintiles Transnational Corp.'s proposed $250 million senior secured first-lien revolving credit facility due 2012 and $900 million first-lien term loan B due 2013. The agency also assigned a B rating with a recovery rating of 5 to the company's $320 million second-lien term loan C due 2014.

The outlook was revised to stable from positive.

The two term loans are being used by Quintiles in order to refinance the existing debt and preferred equity that resulted from the company's management-led buyout in 2003. While lowering its overall borrowing rate, the refinancing increases total debt leverage slightly from current levels, the agency said.

S&P said the rating reflects the company's high leverage, aggressive financial policy and customers' inconstant appetite for the Quintiles' services. Somewhat mitigating these factors, however, is Quintiles' leading position as a contract services provider to the pharmaceutical and biotechnology industries, its ample cash reserves and its consistently improving operating performance.

Over the next year, annualized total lease-adjusted debt to EBITDA is expected in the mid-4x area, the agency.

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