S&P: Endo unsecured debt on negative watch

Standard & Poor’s said it affirmed the B+ corporate credit rating on Endo International plc.

The agency also said it affirmed the BB rating on senior secured debt co-issued by subsidiaries Endo Luxembourg Finance I Sarl and Endo LLC.

S&P also said it placed on CreditWatch with negative implications the B+ ratings on the senior unsecured debt co-issued by subsidiaries Endo Finance LLC and Endo Finco Inc.

Endo International recently announced that it is acquiring Par Pharmaceutical Cos. Inc. for $8 billion. The financing mix is anticipated to consist of about 55% debt and 45% equity, the agency said.

The negative watch reflects the dilutive impact of the company’s expansion in overall debt levels on unsecured recovery, S&P said.

The agency said it will resolve the CreditWatch once the details of the acquisition financing are announced.

The outlook is stable.

The ratings reflect a belief that Endo can successfully integrate Par’s business, enhance cash flow generation and de-leverage its balance sheet, albeit at a slower pace than originally expected, S&P said.

The ratings reflect Endo’s business risk, which is characterized by a sizable and diverse high-margin pharmaceutical portfolio, the agency said.

Its positive rating factors are offset by increased generic competition for the company’s lead product and relatively high leverage, S&P said.

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