Moody's rates Papillon loans Ba3, notes Caa1

Moody's Investors Service said it assigned first-time ratings to Papillon Acquisition Inc., the vehicle that will be used to acquire inVentiv Health Inc. in its leveraged buyout by Thomas H. Lee Partners. The assigned ratings include a B2 corporate family rating and a B2 probability of default rating, along with a Ba3 (LGD3, 31%) rating on its $75 million senior secured revolver due 2015, Ba3 (LGD3, 31%) rating on its $525 million senior secured term loan due 2016, Caa1 (LGD5, 85%) rating on its $275 million unsecured notes due 2018 and a speculative grade liquidity rating of SGL-2.

The ratings on inVentiv Health will be withdrawn at the close of the transaction.

The outlook is stable.

The ratings reflect the considerable financial leverage taken on in the leverage buyout transaction and resulting credit metrics that are reflective of a single-B rating, Moody's said.

The ratings also are constrained by a number of risks inherent in the business including project cancellations due to FDA non-approval decisions or generic competition of client's products, reduced client marketing budgets and pharmaceutical industry consolidation, the agency said.

The ratings are supported by the breadth of inVentiv's diverse service offerings, which could result in increased cross-selling opportunities and stronger client relationships, Moody's added.

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