S&P gives A- to Zimmer notes

Standard & Poor's said it assigned its A- issue-level ratings to Zimmer Holdings Inc.'s proposed roughly $7.6 billion senior unsecured notes offering, to be issued in several tranches, and placed the ratings on CreditWatch with negative implications.

Proceeds will be used to fund Zimmer’s acquisition of Biomet Inc. (B+/positive watch/--), which is scheduled to close in coming weeks.

The A- corporate credit rating remains on CreditWatch with negative implications. S&P expects to lower the corporate credit rating and the issue-level ratings on the senior unsecured debt to BBB at the close of the acquisition, stemming from the largely debt-financed nature of the acquisition.

The agency expects the outlook to be stable.

Post-acquisition, the BBB ratings would reflect S&P’s assessment of the business risk as "strong" (improved from "satisfactory") and the financial risk as "significant" (weakened from "minimal").

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