S&P gives St. Jude Medical convertibles BBB+

Standard & Poor's said it assigned its BBB+ rating to St. Jude Medical Inc.'s $1.0 billion convertible senior debentures due 2008.

Proceeds will be used to repay commercial paper incurred to finance $700 million of share repurchased that were completed in February, to fund subsequent share repurchases and to fund the cost of a convertible note hedge transaction, the agency said, noting that the offering may be increased by $200 million, the proceeds of which would be used to finance share repurchases.

The BBB+ rating reflects St. Jude's portfolio of leading medical devices, which generates solid cash flow, as well as its conservative financial policies and strong debt protection measures, S&P added.

These factors mitigate the company's vulnerability to technological change within its relatively narrow disease focus areas, the risks of competing with larger and diversified rivals and its exposure to reimbursement risk/pricing pressures typical for health care industry participants, the agency said.

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