S&P affirms Warner Chilcott

Standard & Poor's said it affirmed the BB corporate credit rating on Warner Chilcott plc.

The agency also said it assigned a BBB- rating and 1 recovery rating to the new senior secured debt.

S&P also lowered the rating and revised the recovery rating on the existing senior unsecured notes to BB- and 5, respectively, from BB and 3.

The recovery rating of 5 indicates 10% to 30% expected recovery in a default.

The actions follow news that the company will issue an additional $600 million of term loans to partly finance a $1 billion shareholder dividend. The additional debt increases adjusted pro forma leverage to about 3x, S&P said.

The ratings reflect the company's fair business risk profile that incorporates some product and therapeutic diversity and the company's successful strategy of active brand management, the agency said.

The ratings also consider the threat of generic competition to the company's product portfolio and its limited research and development capabilities, S&P said.

These pressures could push the company to make additional debt-financed product or company acquisitions over the next year, the agency added.

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