S&P puts Diplomat Pharmacy on negative watch

S&P said it placed Diplomat Pharmacy Inc.’s ratings on CreditWatch with negative implications.

“Diplomat Pharmacy Inc. significantly lowered its EBITDA guidance for 2019. This will likely require the company to seek near-term covenant relief,” said S&P in a press release.

S&P said it expects Diplomat to violate its covenant in the fourth quarter of 2019.

“However, we expect lenders to grant the company a waiver in anticipation of a possible strategic transaction, such as a sale of the company or a major deleveraging asset sale in the near term. For this reason, we are affirming the B- issuer credit rating,” S&P said.

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