S&P rates Azurity loan B

S&P said it assigned a B issuer credit rating to Azurity Pharmaceuticals Inc. The outlook is stable.

At the same time, the agency assigned a B issue-level rating and 3 recovery rating to the company's term loan and revolver, reflecting expectations for meaningful recovery of about 50%-70% (rounded estimate: 55%) in the event of default.

Azurity plans to issue a new $600 million term loan, together with equity financing, to fund its acquisition of Arbor Pharmaceuticals Inc. and refinance its existing debt.

“The stable rating outlook reflects our expectation that despite steady earnings growth and positive cash flow generation, Azurity will maintain leverage above 5x given the risks to the pipeline and our expectation for the company to pursue an aggressive growth strategy,” S&P said in a news release.

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