S&P cuts Owens & Minor, rates loans BB

S&P said it lowered its ratings on Owens & Minor Inc., including the corporate credit and issue-level ratings, to BB from BBB-.

At the same time, the agency removed the ratings from CreditWatch, where they were placed with negative implications on Nov. 1, 2017.

The outlook is negative.

The agency said the rating on the existing senior secured debt is now BB. S&P assigned a 3 recovery rating, indicating expectations for meaningful (50%-70%; rounded estimate: 50%) recovery in a default scenario.

Additionally, S&P assigned a BB rating to the company's proposed senior secured $196 million term loan A-2 and $500 million new term loan B, the same as the existing debt. The recovery rating is 3, indicating meaningful (50%-70%; rounded estimate: 50%) recovery.

“The two-notch downgrade to BB reflects a view that although the acquisition of one of Halyard's businesses increases Owens & Minor's scale, EBITDA margins, growth profile and business diversification–providing an entrance into the medical product manufacturing space and expanding its product portfolio–we view the target as more vulnerable to deterioration,” the agency said in a news release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.