Dennis Gillings’ $1.7 billion move to reacquire Quintiles drew a negative warning Wednesday from Standard & Poor’s Ratings Services.

In a statement, S&P assigned a “BB-” loan rating to a proposed $310 million loan and a $75 million credit line that Gillings and his investment group is using to help finance the transaction.

“The corporate credit rating remains on CreditWatch with negative implications, where it was placed April 11, 2003, following the company’s agreement to be sold,” the statement said.

Quintiles (Nasdaq: QTRN) stockholders are expected to approve the deal at a meeting in RTP on Sept. 25. The stock closed at $14.28 on Wednesday.

If the deal is approved, S&P will assign the new company a “BB-” rating.

Quintiles notes worth $450 million that come due in 2013 were assigned a “B” rating.

The ratings “reflect the large financial burden the company has assumed to fund its management-led leveraged buyout, as well as customers’ inconstant appetite for Quintiles’ services,” said S&P credit analyst David Lugg in the statement. “However, the ratings also reflect the company’s leading position as a service provider to wealthy pharmaceutical companies.”

S&P said the leveraging of resources will force Quintiles to deal heavily with debt financing, noting “funds from operations to total debt will fall about 10 percent from 85 percent. Accordingly, the credit profile is dominated by financial concerns.”

S&P did reiterate that “Quintiles’ role as the leading provider of contract research and sales services to mainly pharmaceutical customers remains undiminished.” But the firm did note slowdowns in research demand and new product introductions.

“Still, longer term prospects are promising. With an increasing number of drug candidates in the middle stages of development, it seems likely that demand for Quintiles’ services will improve in the next few years,” the S&P statement continued. “Moreover, the company appears to be well positioned to capitalize on changes in the Japanese marketplace.”

S&P: www.standardandpoors.com

Quintiles: www.quintiles.com