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Prospect News home > News index > List of issuers H > Headlines for Hill-Rom Holdings, Inc. > News item |
S&P cuts Hill-Rom CCR, debt; rates loan BBB
Standard & Poor's said it lowered its corporate credit rating on Hill-Rom Holdings Inc. by two notches to BB+ from BBB following the planned acquisition of Welch Allyn that will be financed with $2 billion of debt.
The outlook is stable.
At the same time, the agency assigned a BBB issue-level rating to the company’s $2.25 billion secured facility. The recovery rating is 1, reflecting an expectation of high (90%-100%) recovery in the event of default.
S&P also lowered its rating on Hill-Rom’s existing unsecured debt to BB- from BBB. The recovery rating is 6, reflecting an expectation of negligible (0%-10%) recovery in the event of default.
"The downgrade of Hill-Rom Holdings Inc. reflects its additional tolerance of higher debt as it pursues portfolio diversification and expansion," S&P credit analyst Tahira Wright said in a news release.
"While the acquisition of Welch Allyn provides a more diversified product portfolio by adding medical diagnostic equipment to its existing beds, surfaces, and surgical equipment portfolio, leverage is significantly higher than we had previously expected."
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