Moody's assigns to Synlab Ba3

Moody's Investors Service said it assigned a Ba3 corporate family rating and a Ba3-PD probability of default rating to Synlab AG, the new top entity of the Synlab Group.

Concurrently Moody's gave a B1 rating to Synlab’s new €735 million senior unsecured term loan A and a B1 rating to its new €500 million senior unsecured revolving credit facility. Finally, Moody's upgraded the ratings of the term loans currently issued by Synlab Bondco plc to Ba2 from B2.

“The Ba3 corporate family rating takes into account the current strong tailwind from Covid-19 testing activities. Synlab recorded a 24% revenue growth in 2020 driven by a strong acceleration of Covid-19 testing activities, mainly PCR testing, during Q3 and Q4. For 2020, the company estimates that its positive revenue impact from Covid-19 testing is €630 million, which is net of revenue lost on its core business due to the impact of lockdown and social distancing measures especially during the first wave of the pandemic,” the agency said in a press release.

The outlook on Synlab and Synlab Bondco is stable, reflecting the forecast that the operating environment will remain favorable for the next quarters as the additional volume from Covid-19 tests will more than offset disruptions on core volume as long as the pandemic persists, Moody’ s said.

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