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S&P rates Cooper loans BB
Standard & Poor's said it assigned a BB corporate credit rating to The Cooper Cos. Inc. in advance of the company's planned merger with Ocular Sciences. The $1.2 billion transaction is expected to close in November 2004, pending regulatory approval.
S&P also assigned a BB rating to Cooper's proposed $750 million credit facility, which has a 4 recovery rating. The facility includes a $275 million five-year revolving credit facility, a $325 million five-year (amortizing) term loan A maturing November 2009; and a $150 million seven-year (amortizing) term loan B maturing November 2011.
Proceeds will be used to support the acquisition of Ocular, refinance existing debt, and provide for working capital and general corporate purposes.
Notwithstanding Cooper's expanded scale, scope, and international penetration after the merger, S&P said, the rating is based on Cooper's single product line focus and its No. 3 position (18% global market share) in the $3.5 billion soft contact lens industry relative to two large competitors with materially greater resources. The ratings also reflect the risks inherent in integrating its largest-ever acquisition and temporarily elevated leverage following the merger.
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