S&P puts Covidien on positive watch

Standard & Poor’s said it placed its A corporate credit rating and issue-level ratings on Covidien plc on CreditWatch with positive implications.

“The CreditWatch placement follows the announcement that Medtronic plans to acquire Covidien,” said S&P credit analyst David Kaplan in a news release. “We estimate that the transaction would significantly enhance the business risk and increase adjusted net leverage to about 2.1x-2.2x, from about 1.7x at Covidien as it stands today.”

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