S&P changes Mallinckrodt to negative

Standard & Poor's said it affirmed its BB- corporate credit rating on Mallinckrodt plc and revised the outlook to negative from stable.

The agency will review the issue-level and recovery ratings when more detail surrounding the financing plan and capital structure becomes available.

S&P said the negative outlook reflects risk to its base case that Mallinckrodt will not be able to reduce leverage to less than 5 times by the end of 2016 due to its aggressive acquisition strategy. This is despite the agency’s expectation of double-digit revenue growth, modest margin expansion and continued free cash flow generation.

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