S&P lowers Ortho-Clinical

Standard & Poor’s said it lowered the corporate credit rating on Ortho-Clinical Diagnostics, Inc. to B- from B.

The agency also said it lowered the rating on the company’s senior secured facilities to B- from B. The recovery rating remains at 3, reflecting 50% to 70% expected default recovery.

S&P also said it lowered the rating on the company’s senior unsecured notes to CCC from CCC+. The recovery rating on this debt remains at 6, reflecting 0 to 10% expected default recovery.

The outlook is stable.

The agency also said it would withdraw the company’s B- corporate credit rating and assigned a B- corporate credit rating to Ortho-Clinical Diagnostics Bermuda Co. Ltd. because the company’s financial statements are consolidated under Ortho-Clinical Diagnostics Bermuda’s name.

It also is the parent and the owner of both Ortho-Clinical’s international and U.S. operations.

The ratings will remain assigned to Ortho-Clinical Diagnostics, Inc. and Ortho-Clinical Diagnostics SA, which are the co-borrowers of the company’s debt.

The debt-issuing subsidiaries are considered core to the group based on similar names and businesses, along with their significant contribution to the consolidated entity, S&P said.

The downgrade follows Ortho-Clinical’s continued operating underperformance lasting for several quarters, the agency said.

The group’s projected 2015 revenue and EBITDA are trending below previous projections by about $150 million and $100 million, respectively, S&P said.

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