Moody's affirms Charles River

Moody's Investors Service said it affirmed Charles River Laboratories International Inc.'s Ba2 corporate family rating and Ba2 probability of default rating, along with the Ba1 (LGD 3, 30%) rating on its $900 million senior secured credit facility including the term loan A, which was recently increased to $550 million from $400 million.

That incremental $150 million will be used to fund share repurchases, Moody's said.

The agency also said it affirmed its speculative-grade liquidity rating at SGL-2, reflecting its expectations for good liquidity over the next 12 months.

The outlook is stable.

The affirmation reflects Charles River's continued leading market positions in laboratory research models and services and preclinical services, Moody's said, as well as good geographic and customer diversity.

The ratings are constrained by an expectation for continued operating headwinds, particularly in the PCS business, including constrained research and development spending by pharmaceutical clients, overcapacity in the preclinical testing industry and pricing pressure, the agency said.

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