S&P assigns Glenmark notes BB-

S&P said it assigned its BB- issue rating to Glenmark Pharmaceuticals Ltd.’s proposed $200 million senior unsecured notes. Proceeds are expected to be used to refinance its $200 million senior unsecured notes due on Aug. 6, 2021, thus not impacting the ratings immediately.

“Our rating outlook on Glenmark remains negative. We view the company’s proactive refinancing proposal as credit positive and essential to maintain the BB- rating. We believe the refinancing, if successful, will alleviate some of the liquidity pressure building for Glenmark over the next 12 months. However, our issuer rating on Glenmark also hinges on deleveraging, such that the company’s ratio of funds from operations (FFO) to debt moves materially above 20%,” said S&P in a press release.

The deleveraging depends on reviving Glenmark’s generic pharmaceutical business or potential strategic measures such as the monetization of its active pharmaceutical ingredient business or the new molecular entities portfolio or rationalization of its non-core businesses.

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