Fitch rates Healthcare Royalty BB

Fitch Ratings said it gave a first-time long-term issuer default rating of BB to Healthcare Royalty, Inc. and to its indirect, wholly owned subsidiary, HCRX Investments Holdco, LP. The outlook is stable.

Fitch also assigned these expected ratings to HCRX of BBB-/RR1 for the new long-term secured credit facilities and BB/RR4 for the new senior unsecured notes. The new secured long-term credit facilities will comprise a revolving credit facility and a term loan B.

“HRI is a mid-market company focused on investing in biopharmaceutical royalty related transactions. Through March 31, 2021, the company has demonstrated a solid track record of returns while deploying more than $4.5 billion of capital in more than 74 transactions over 15 years. Fitch believes that HRI has designed an effective royalty acquisition process through years of experience that has a bias toward identifying product revenue risks and establishing structural protections against product sales underperformance,” the agency said in a press release.

The proceeds along with proceeds from the sale of new HRI common stock, are expected to be used to repurchase on a pro rata basis a portion of the limited partnership interests held by the legacy partners of HRI's partnerships and to make new royalty investments.

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