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S&P: Endo on negative watch
Standard & Poor's said it affirmed the BB- corporate credit rating on Endo Health Solutions Inc.
S&P also said it placed the BB+ rating on Endo's senior secured debt and BB- rating on Endo's senior unsecured debt on CreditWatch with negative implications because the size of these debt classes could increase relative to the estimate of Endo's value in the event of default.
The recovery rating on the senior secured debt is 1, indicating 90% to 100% expected default recovery, the agency said, and the recovery rating on the senior unsecured debt is 4, indicating 30% to 50% expected default recovery.
The outlook is stable.
The acquisition of Paladin does not alter the fair assessment of Endo's business risk profile with gradually improving product diversity, S&P said.
The agency said it does not expect the transactions to materially affect Endo's leverage. But, S&P said it continues to believe Endo's growth goals and financial policies are aggressive and leverage is expected to rise to more than 4x from 2.7x as of Sept. 30, reflecting both higher debt levels and lower EBITDA.
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