S&P rates ICON, notes BBB-

S&P said it assigned BBB- ratings to ICON Investments Six DAC, a wholly owned financing subsidiary of ICON plc and its planned $2 billion of senior secured notes. The outlook is stable.

“The rating on ICON Investments, a direct wholly owned financing subsidiary of ICON plc, is equalized with that on its parent. The rating reflects our assessment of the subsidiary's status as core to the wider group. We assigned our BBB- rating on the proposed $2 billion senior secured notes, in line with the rating on the group. This reflects the absence of any material structural subordination concerns.,” S&P said in a press release.

The proceeds will be used to prepay up to $2 billion of $2.97 billion outstanding under the term loan due 2028.

“The stable outlook indicates that we expect ICON to sustain leverage comfortably below 3x. We also forecast that funds from operations (FFO) to debt will rise above 30% over the next 24 months as the business shows solid growth, coupled with adjusted EBITDA margins above 20% despite difficult market conditions,” S&P said.

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