S&P lowers Mylan

Standard & Poor's said it lowered its corporate credit and senior unsecured debt ratings on Mylan Laboratories to BB+ from BBB- and placed all the ratings on CreditWatch with negative implications.

The actions come on the heels of the company's announcement that it is acquiring Merck KGaA's generic business for €4.9 billion in an all-cash transaction, the agency noted.

"The acquisition is expected to add a significant amount of debt and Mylan's financial policies and profile will be clearly inconsistent with an investment-grade rating," explained S&P credit analyst Arthur Wong.

The agency added that the company has disclosed plans to issue around $1.5 billion to $2 billion of equity and equity-linked securities in the near term to reduce its leverage.

However, even assuming $2 billion of equity, Mylan's pro forma debt to EBITDA and funds from operations to total debt will be much weakened, the agency said.

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