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S&P rates St. Jude Medical notes A, places on watch
Standard & Poor’s said it assigned its A issue-level rating to St. Jude Medical Inc.’s proposed issuance of about $1.5 billion of senior unsecured notes consisting of tranches maturing in 2018, 2020 and 2025, and placed those ratings on CreditWatch with negative implications.
The company plans to use the proceeds to fund the acquisition of Thoratec and for general corporate purposes.
S&P said the CreditWatch placement reflects S&P’s expectation for St. Jude's debt leverage to peak above 3x, as part of its acquisition of Thoratec, a meaningful increase above current levels of around 1.8x.
“We expect the company will prioritize debt repayment over other expansionary opportunities, and to gradually return leverage to historical levels,” S&P said in a news release.
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