Moody’s rates Charles River revolver, loan Ba2

Moody’s Investors Service said it affirmed Charles River Laboratories International Inc.’s Ba2 corporate family rating, Ba2-PD probability of default rating and SGL-1 speculative grade liquidity rating.

The agency also said it assigned Ba2 (LGD 3) ratings to its new $900 million senior secured revolving credit facility due May 2020 and $400 million senior secured term loan due May 2020.

Moody’s also changed its outlook to positive from stable.

The positive rating outlook reflects Charles River’s improving business fundamentals and an expectation for continued organic growth and margin stability, the agency said.

The positive outlook also reflects greater business diversification following a number of acquisitions over the past several years, which should help insulate Charles River from potential volatility in the toxicology business, Moody’s said.

The rating consider Charles River’s leading competitive position in its core markets and good geographic and customer diversity, the agency said.

The ratings are constrained by the company’s modest absolute size and its focus on niche markets, some of which are believed to face longer-term headwinds due to reduced usage of models in scientific research and customer consolidation, Moody’s said.

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