S&P lowers IMS Health, rates loan BB-, notes B

Standard & Poor's said it lowered the corporate credit rating on IMS Health Inc. to B+ from BB-.

The outlook is stable.

The agency also said it lowered the rating on the existing term loan B to BB- in conjunction with the downgrade. The recovery rating is unchanged at 2, indicating 70% to 90% expected recovery in a default.

The agency also said it lowered the rating on the existing unsecured notes to B in conjunction with the downgrade. The recovery rating on this debt is unchanged at 5, indicating 10% to 30% recovery expectation.

S&P also said it assigned a BB- rating to the company's proposed $750 million term loan B with a recovery rating of 2, indicating 70% to 90% recovery expectation.

The proposed $500 million senior unsecured notes was assigned a B rating with a recovery rating of 5, indicating 10% to 30% recovery expectation.

The downgrade follows news that the company will be issuing $1.25 billion of additional debt to fund a sponsor dividend, S&P said.

Pro forma leverage will increase to 5.7x, slightly higher than the leverage incurred when the sponsors acquired the company in 2010, the agency said, and a departure from an expectation that leverage would remain below 5x on an ongoing basis.

The ratings reflect the company's highly leveraged financial risk profile, highlighted by an expectation of leverage sustained at more than 5x over the near term, the agency said.

But the company does have a dominant position as a provider of critical information to the pharmaceutical market. However, that is offset by its narrow focus in providing information primarily to that market, S&P said.

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