S&P upgrades PRA Health, debt

Standard & Poor's said it raised its corporate credit rating on PRA Health Sciences Inc. to BB- from B+.

The outlook is stable.

At the same time, the agency affirmed the BB- issue-level rating on the senior secured first-lien credit facility and revised the recovery rating to 3 from 2, indicating an expectation for meaningful (50% to 70%; at the low end of the range) recovery in the event of payment default.

At the same time, S&P raised the issue-level rating on the senior unsecured debt to B+ from B. The recovery rating on this debt is 5, indicating expectations for modest recovery (10% to 30%; at the low end of the range) in the event of default.

"We based the upgrade on PRA's continued solid operating performance, which has given us greater confidence that PRA will be able to maintain leverage below 5x over time despite the potential for an acquisition or dividend, given Kohlberg Kravis Roberts & Co.'s (KKR) controlling ownership position," S&P credit analyst Matthew Todd said in a news release.

"The company has successfully integrated several acquisitions since 2013 including RPS and CRI Lifetree, bringing margins to a level comparable to peers, and management believes revenue synergies remain. We believe the company will continue to pursue aggressive growth strategies given the potential for consolidation in the industry."

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