Fitch gives Charles River loan BBB, notes BBB-

Fitch Ratings said it gave a BBB rating to Charles River Laboratories International Inc.’s $3 billion secured revolver due 2026 and BBB- ratings to its senior unsecured notes due 2028, 2029 and 2031. The agency also assigned BBB- issuer default ratings to the company and its subsidiaries Charles River Laboratories Luxembourg Sarl, Charles River Nederland BV and Charles River Laboratories Holdings Ltd. (UK). The subsidiaries are co-borrowers.

“The BBB- IDR reflects CRL's strong position as a leading drug discovery, non-clinical development and contract manufacturing company with a diversified revenue base. CRL's integrated non-clinical portfolio of services is unique and provides a natural revenue growth path as clients move through the research and development continuum. In addition, the company's partnership strategy is becoming a critical part of its portfolio growth,” the agency said in a press release.

However, “These strengths are offset primarily by a rapid M&A strategy that raises business and financial risks and has the potential to cause gross leverage to rise above CRL's stated gross leverage target of 3.5x, albeit for anticipated short periods of time,” Fitch said.

The outlook is stable.

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