S&P: Bristol-Myers Squibb notes A+, preferreds A-

Standard & Poor's said it assigned preliminary A+ ratings to notes filed by Bristol-Myers Squibb Co. under a shelf registration.

The agency said it assigned A+ ratings to its senior unsecured notes due 2017, senior unsecured notes due 2022 and senior unsecured notes due 2042. The amounts and rates for the three maturities will be determined by market conditions, the agency said.

The agency also assigned a preliminary A- rating to its preferred stock issue.

The proceeds will be used to finance the $5.3 billion acquisition of Amylin Pharmaceuticals Inc., as well as the costs of retiring Amylin debt and other transaction-related expenses, which will raise the total cost to about $7 billion, S&P said.

The company reached an agreement to purchase diabetes specialist Amylin. Subsequent to the acquisition, Bristol-Myers Squibb and AstraZeneca plc will expand their diabetes collaboration via an investment by AstraZeneca, S&P said.

This additional investment will cover half the acquisition cost, the agency said, and both partners will share in the profits and cash flow from Amylin's novel diabetes treatments.

This transaction is viewed as a logical extension of the current Bristol-Myers Squibb-AstraZeneca diabetes collaboration, S&P said.

The ratings reflect an expectation that, despite sales losses and margin compression because of patent expirations, the financial risk profile of this mid-sized U.S. pharmaceutical company will remain minimal for the next two years, given the low current leverage, the agency said.

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