S&P cuts Mallinckrodt

S&P said it downgraded Mallinckrodt plc to CCC- from CCC and placed all ratings on CreditWatch with negative implications. The agency also trimmed the senior secured issue-level ratings to CCC+ from B- and the senior unsecured issue-level ratings to C from CC. The recovery ratings of 1 and 6, respectively, are unchanged.

“The downgrade and CreditWatch placement reflect our base-case scenario that Mallinckrodt will file for bankruptcy or negotiate a distressed exchange within the next six months,” S&P said in a press release.

Recently, the company reported it is in talks that could result in Chapter 11 proceedings related to a Centers for Medicare and Medicaid Services rebate ruling, opioid litigation and other risks, S&P said.

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