Novasep's B rating affirmed by
S&P
(ADPnews) - Jan 10, 2011 -
S&P today maintained its B long-term corporate credit rating with a "negative" outlook on French pharmaceutical services firm
Novasep Holding SAS.
The rating was also removed from "negative" watch, which originated on September 17, 2010.
The rating action follows company's disclosure in December regarding latest operating trends and new orders.
While lower demand for its synthesis projects and significant rise in leverage have dampened Novasep's 2010 results, the company nabbed three new large contracts in the third quarter alone prompting expectations of some margins and credit metrics improvement in 2011, the service noted.
Besides, Novasep's recent conversion of its payment-in-kind shareholder loan into equity is a sign of the ongoing support of its private-equity shareholder Gilde Partners, which partly offsets its weaker 2010 performance.
The ratings incorporate the company's highly leveraged financial profile after its 2007 leveraged buyout and its "fair" business risk profile, backed by its relatively high margins.
At the same time, the "negative" outlook reflects Novasep's weakened leverage in 2010 and the more time it needs to cut its debt despite the good long-term prospects for the life science outsourcing sector.
Rating agency website:
www.standardandpoors.com