Standard & Poor (S&P)'s has assigned its BBB rating to Israel’s Teva Pharmaceutical Finance II LLC's one billion dollar senior unsecured debt offering.
The debt consists of $400 million in 0.5 percent senior unsecured convertible debentures and $600 million in 0.25 percent senior convertible debentures, both due on February 1, 2024. At the same time, S&P's affirmed its BBB corporate credit and senior unsecured debt ratings on Teva Pharmaceutical Industries. The outlook remains negative.
The debentures are issued under Teva's two billion dollar shelf registration. Proceeds from the debt offering will be used to refinance short-term bank borrowings incurred to pay a portion of Teva's just-completed $3.4 billion acquisition of Sicor, a maker of hospital-based injectables and biogenerics. Teva funded the acquisition with roughly $1.4 billion in stock and two billion dollars of cash.
"The investment-grade ratings on Teva reflect the company's expected continued solid operating performance, based on its strong position in the growing generic drug market, and its moderate financial profile, highlighted by the significant use of equity funding in financing larger acquisitions," said S&P's credit analyst Arthur Wong.
"However, with the acquisition of Sicor, Standard & Poor's believes that Teva has used much of its financial capacity within the constraints of the current rating, and that further major expansion will be limited until the company demonstrates its success in expanding its market presence."
Teva is the largest generic drug maker in the world in terms of sales and number of prescriptions. The company is also one of the most geographically diverse generic drug makers, deriving 62 percent of sales from North America, 23 percent from Europe, and 15 percent from the rest of the world. Israel itself accounts for only 10 percent of sales. — (menareport.com)
© 2004 Mena Report (www.menareport.com)
