Fitch rates Baxalta BBB+

Fitch Ratings said it assigned an issuer default rating of BBB+ to Baxalta Inc., along with a short-term issuer default rating of F2, commercial-paper program of F2 and senior unsecured notes rating of BBB+.

The outlook is stable.

Baxalta is scheduled to be spun off from Baxter International, Inc. on July 1, Fitch said.

The proceeds of Baxalta’s new senior unsecured notes offering are expected to be used to fund a dividend payment of roughly $4 billion to Baxter immediately following the spin-off, the agency said.

Fitch said it expects Baxalta’s debt leverage to exceed 2.5x in 2015, which is moderately higher than the target for the BBB+ ratings.

EBITDA growth and stable debt levels should drive debt-to-EBITDA closer to 2.3x by the end of 2017, which the agency said it views as supportive of the BBB+ rating.

Baxalta is making progress moving a number of projects through its pipeline and expects about 20 new product launches generating more than $2.5 billion in sales by 2020, Fitch said.

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