Research Update: CAB, HoldCo Of Leading Laboratory Chain Biogroup, Upgraded To 'B' On Better-Than-Expected Metrics; Outlook Stable

Biogroup continues to increase its EBITDA both through continued external growth and strong momentum from COVID-19 testing. We estimate the financial leverage on the cash-interest-paying debt at 5.7x in 2021, then increasing to 6.4x in 2022, reflecting lower earnings contributions from COVID-19 testing. We consequently raised to 'B' from 'B-' the issuer credit rating on CAB, the holding company of Biogroup, and the issue ratings on the group's €1,750 million term loan B, including the proposed €300 million add-on used to fund new acquisitions, and €800 million senior secured notes. We also raised the issue rating on the group's €250 million senior notes to 'CCC+' from 'CCC'. The stable outlook reflects our assumption of seamless integrations of future acquisitions, alongside

...- Biogroup continues to increase its EBITDA both through continued external growth and strong momentum from COVID-19 testing. - We estimate the financial leverage on the cash-interest-paying debt at 5.7x in 2021, then increasing to 6.4x in 2022, reflecting lower earnings contributions from COVID-19 testing. - We consequently raised to 'B' from 'B-' the issuer credit rating on CAB, the holding company of Biogroup, and the issue ratings on the group's 1,750 million term loan B, including the proposed 300 million add-on used to fund new acquisitions, and 800 million senior secured notes. We also raised the issue rating on the group's 250 million senior notes to '###+' from '###'. - The stable outlook reflects our assumption of seamless integrations of future acquisitions, alongside continued substantial contribution from COVID-19 testing, sustaining financial leverage on cash-interest-paying debt below 7x....

Research Update