S&P rates Mead Johnson notes BBB

Standard & Poor's said it assigned a BBB corporate credit rating to Mead Johnson Nutrition Co. and BBB- ratings to its proposed $1.5 billion senior unsecured notes to be issued in three parts with five-, 10- and 30-year maturities.

The outlook is stable.

Proceeds will be used to repay $1.7 billion of related-party notes held by majority shareholder Bristol-Myers Squibb Co.

Ratings reflect the company's leading position in the infant formula market, its good brand recognition, strong geographical diversification and good cash flow generation, S&P said.

These factors are partially offset by a relatively narrow business focus and moderate debt levels, the agency said.

Bristol-Myers Squibb Co. (A+/stable/A-1) has an 83% equity stake in Mead Johnson following a partial sale of the company through an initial public offering in February. Despite the significant equity ownership, S&P said it treats Mead Johnson as a standalone company and do not factor any implicit support in the rating.

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