Fitch trims Elanco

Fitch said it downgraded the issuer default ratings of Elanco Animal Health Inc. and Elanco US Inc. to BB from BB+ and its senior unsecured notes to BB/RR4 from BB+/RR4 and revised the outlooks to stable from negative. The senior secured debt ratings were affirmed at BBB-/RR1.

“The rating actions reflect Fitch's updated view that leverage is not likely to return to levels consistent with the previous BB+ IDR until 2023, approximately a year later than originally expected and leverage will be approximately a turn higher than Fitch assumed in the interim. The detailed public guidance that Elanco provided at its December 2020 Investor Day, including a bridge to 2023 metrics, indicates a similar trajectory and timeline for reducing leverage. Fitch's updated forecasts assume a more modest and back-ended rebound in revenues and EBITDA, particularly in the farm animal segment,” the agency said in a press release.

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