Fitch assigns Neopharmed B, notes B+

Fitch Ratings said it assigned expected B+/RR3 ratings to Neopharmed Gentili SpA’s planned €750 million of senior secured notes. The agency also gave the company a first-time issuer default rating of B. Neopharmed also plans to obtain a €130 million revolver. The outlook is stable.

“The IDR reflects Neopharmed's well-established position within Italy with its asset-light business model supporting strong operating profitability and high cash flow conversion. The rating is constrained by the high opening leverage, limited business size and exposure to one regulatory authority, albeit with some diversification across products and therapeutic area,” Fitch said in a press release.

Fitch said it forecasts Neopharmed’s opening EBITDA leverage will be 6.3x in 2024, which is higher than most Fitch-rated peers in the sector. “The high leverage constrains the overall corporate rating at B, although we project a steady deleveraging towards 5x by 2027.”

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