NMC Healthcare given Ba1 rating by Moodys

NMC Healthcare, the largest healthcare provider in the UAE, has received a rating from Moody’s Investor Service, the first from the agency for the London-listed company with a market value of about $10.8 billion.

The agency assigned the firm a Ba1 corporate family rating and Ba1-PD probability of default rating.

That puts the company one notch below investment grade, meaning that investment in the firm’s debt has an element of speculation and carries some credit risk.

Moody’s said the outlook on the rating was stable.

The ratings with a stable outlook “reflect its business profile as the largest healthcare provider in the United Arab Emirates, which is an affluent healthcare market with an attractive demographic profile,” Moody’s said yesterday.

“NMC also operates one of the largest wholesale distribution businesses in the UAE, including fast-moving consumer goods, pharmaceuticals and scientific equipment.

“The ratings also take into account favourable regulatory bodies that adopt a constructive approach to dealing with any challenges that may arise.”

When it comes to the question of risk, Moody’s said that the company has not faced any closure or censure of its facilities and that it continues to make an effort to meet self-imposed standards that are higher than those required by regulators.

“This approach supports, in turn, its resilient business model, loyal customer base, strong brand recognition and market leading position,” the ratings agency said.

“NMC also continues to attract highly skilled doctors to its facilities from the Middle East and further afield through enticing remuneration packages and working conditions and because of the good quality of life offered to expatriate workers in the UAE.”

Separately, NMC Healthcare said that it would sell $450 million of senior unsecured guaranteed convertible bonds due in 2025.

The convertible bonds will be marketed with a fixed coupon of 1.875 per cent.

Settlement and delivery of the bonds is expected to take place on April 30.

The proceeds from the sale will be used to repay part of the $1bn facility put in place at the beginning of 2018, NMC said.

NMC reported a 38 per cent year-on-year rise in 2017 net profit. Net income rose to $209.2m, while revenues climbed 31.3 per cent to $1.6bn for the year.