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S&P downgrades IQVIA's corporate credit rating

S&P Global Ratings downgraded IQVIA Holdings Inc.'s corporate credit rating to BB+ from BBB-.

The outlook on the rating is stable.

S&P said the downgrade is due to more aggressive than expected financial policy, although the rating agency believes the underlying business has positive tailwinds supporting EBITDA growth and predictable cash flows.

IQVIA has gradually increased adjusted net long-term debt by about $3.8 billion, or more than 40%, since the 2016 merger of Quintiles and IMS, outpacing pro forma EBITDA growth and exceeding S&P's expectations for leverage.

"Although we still view the trends of the underlying business positively, the pace of debt issuance has exceeded our expectations and led us to now expect adjusted net debt leverage of 4.8x in 2018, and we believe leverage will stay in the mid-4x area because of acquisitions and share repurchases," S&P said.

The stable outlook reflects S&P's expectations that IQVIA will maintain its leadership positions in both its commercial and research and development solutions segments and single-digit declines in its integrated engagement services. The outlook also reflects slightly improving margins from ongoing synergies and operating leverage as the business grows, the rating agency added.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.