Fitch rates Owens & Minor bonds BBB-

Fitch Ratings said it assigned a BBB- rating to the new senior unsecured bonds issued by Owens & Minor, Inc.

The proceeds are expected to be used to redeem the company’s $200 million of 2016 bonds, fund the $233 million purchase of Medical Action Industries Inc. and for general corporate purposes.

The outlook is stable.

The company has a long-term issuer default rating of BBB-, senior unsecured bank facility rating of BBB- and senior unsecured notes rating of BBB-.

Pro forma for the bond issuance, Fitch said it expects Owens & Minor’s debt leverage to about 2x.

The ratings are constrained by company management’s stated willingness to increase debt leverage for mergers and acquisitions, the agency said.

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