Fitch: Thermo Fisher notes A-

Fitch Ratings said it assigned an A- rating to Thermo Fisher Scientific, Inc.'s $2.1 billion of proposed senior notes. Fitch said it expects to assign an F2 rating to Thermo Fisher's $1 billion commercial paper program.

The outlook is stable.

Fitch affirmed Thermo Fisher's ratings on May 19, following the company's announcement that it plans to acquire Phadia AB for about $3.6 billion. Funding sources for the transaction are expected to include the proposed $2.1 billion of five and 10-year senior notes, $1 billion of commercial paper and $500 million of cash on hand.

The ratings consider that debt funding for the Phadia and Dionex acquisitions has significantly increased leverage, rapid debt pay-down post the transactions is achievable based on very strong levels of free cash flow as well as the expectation that Thermo Fisher will prioritize debt reduction as a use of discretionary free cash flow in 2012 as opposed to share-holder friendly capital allocation, the agency said.

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