S&P rates Alvogen loan B

Standard & Poor’s said it raised the corporate credit rating on Alvogen Pharma US Inc. to B from B-.

The agency also said it assigned of B to the $675 million secured term loan. The recovery rating on the term loan is 4, indicating 30% to 50% expected default recovery.

The outlook is stable.

The upgrade is based on a belief that 2014 financial performance, including leverage of less than 3x, will exceed the base-case expectation, S&P said.

The agency said it expects Alvogen’s revenue growth and margin expansion to remain higher than the initial estimates due to better-than-expected product performance, price increases and product mix.

Although the debt issuance increases pro forma leverage to about 4x, S&P said it does not expect Alvogen to tolerate leverage in excess of 5x in pursuit of additional debt-financed acquisitions to increase its scale or for shareholder-friendly actions.

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