Fitch cuts Perrigo

Fitch Ratings said it downgraded the senior unsecured notes issued by Perrigo Co. plc and Perrigo Finance Unlimited Co. to BB/RR4 from BB+/RR4 but affirmed Perrigo Investment LLC's senior secured ratings at BBB-/RR1. The agency also lowered Perrigo Co.’s issuer default rating to BB from BB+.

“The downgrade reflects Fitch's expectation that leverage will be higher for longer than previously anticipated due to a variety of both company-specific and secular challenges, the latter of which appear to be dissipating,” the agency said in a press release.

Fitch said it estimates Perrigo's gross EBITDA leverage will be around 6x in 2024 assuming EBITDA, before the $97 million settlement payment if approved by the court, is about flat around $700 million, improving to the low-5x range assuming the repayment of the $400 million of notes towards the end of the year and improving further towards 4.5x in 2025 assuming some margin expansion.

The outlook is negative.

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