Moody’s downgrades Endo, debt

Moody's Investors Service said it downgraded the corporate family rating and probability of default ratings of Endo Luxembourg Finance I Co. Sarl, Endo Finance Co. and Endo Finance LLC, all subsidiaries of Endo International plc, to B1 and B1-PD from Ba3 and Ba3-PD, respectively.

The rating on the senior secured debt was downgraded to Ba2 from Ba1 and the rating on the senior unsecured debt was downgraded to B3 from B1.

The SGL-2 speculative grade liquidity rating was affirmed.

The outlook is negative.

Moody’s said the downgrade of the corporate family rating incorporates a number of negative developments over the last several months including generic competition on Voltaren Gel and a significant increase in vaginal mesh litigation accruals.

More recently, competition and pricing pressure has intensified in Endo's generic business, particularly within legacy Qualitest opioid products.

These developments have culminated in Endo significantly reducing its expectations for revenue, earnings and cash flow in 2016. With earnings growth constrained by multiple headwinds and free cash flow constrained by litigation payments, debt/EBITDA will likely be sustained around 5 times with limited ability for Endo to deleverage meaningfully over the next 12 to 18 months, the agency said.

© 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.