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Moody's rates Quintiles notes B3, upgrades loans
Moody's Investors Service said it assigned a B3 (LGD6, 91%) rating to Quintiles Transnational Holdings Inc.'s $400 million senior unsecured notes due 2014 and upgraded Quintiles Transnational Corp.'s $225 million first-lien senior secured revolving credit facility due 2012 and $963 million first-lien senior secured term loan due 2013 to Ba2 (LGD2, 29%) from B1 (LGD3, 44%).
The agency also affirmed Quintiles' corporate family and probability-of-default ratings at B1 and its $220 million second-lien senior secured term loan due 2014 at B2 (LGD5, 71%, revised from 72%).
The outlook is stable.
Proceeds from the notes are expected be used to fund a shareholder dividend as well as provide additional funding for PharmaBio Development, Inc., an affiliated entity that is expected to be spun off to existing shareholders around the same time as the financing transaction.
The agency said Quintiles' B1 corporate family rating continues to reflect the company's leading position as both a pharmaceutical contract research organization and a contract sales organization, its stable operating performance and its good liquidity profile.
These factors are offset by the company's somewhat high financial leverage, its somewhat modest free cash flow relative to debt and a history of aggressive financial policies.
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