S&P rates Omnicare Piers BB

Standard & Poor's said it assigned its BB rating to Omnicare Inc.'s new $345 million of series B 4.00% Trust Preferred Income Equity Redeemable Securities (Piers) due June 15, 2033.

The securities are being offered in exchange for an existing Piers issue.

Unlike the existing Piers, these are primarily convertible into cash. A change in accounting treatment for these "contingently convertible" securities has rendered them less attractive to issuers as the potential conversion is now dilutive to earnings. Otherwise, the new issue is identical to the old Piers.

S&P said all the ratings assigned to Omnicare, including this one, remain on CreditWatch with negative implications where they were placed May 24, 2004, in light of the company's hostile bid for BB rated competitor NeighborCare Inc. If successful, debt could increase by $1.5 billion, markedly weakening credit measures, with total debt to EBITDA possibly rising to almost 4.5x from 2.5x.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.