Moody's rates Charles River loans Ba1

Moody's Investors Service said it assigned Ba1 ratings to new credit facilities of subsidiaries of Charles River Laboratories International Inc., which are guaranteed by Charles River and include CRL Preclinical Services Montreal's $10 million revolving credit facility and $65 million term loan and CRL Preclinical Services Edinburgh and CRL Clinical Services Ltd.'s $10 million revolving credit facility and $25 million term loan.

Moody's also affirmed Charles River's Ba1 corporate family rating, Ba1 $150 million revolving credit facility, Ba1 $400 million term loan and SGL-1 speculative grade liquidity rating. The outlook is stable.

Charles River's ratings reflect its dominant position in the research models industry and pre-clinical toxicology testing, the continued expansion of operating cash flow over the past few years and the company's relatively conservative policy on leverage, the agency said. The ratings also consider favorable industry trends such as the large and growing market for global research and development and a higher portion of research budgets being outsourced to clinical research organizations such as Charles River due to increased financial incentive to cut the time to bring a drug to market.

The ratings are constrained by the company's acquisitive acquisition strategy, the implementation of a recent $100 million stock buy back program, the risks of managing operations outside of the Americas and the significant acceleration in capital spending in comparison to the past few years, the agency said.

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