S&P Assigns 'BBB' Corp. Rating to Mylan (MYL); Places on CreditWatch Negative

Standard & Poor's Ratings Services assigned its 'BBB-' corporate credit rating to Mylan (NASDAQ: MYL), parent company of Mylan Inc., and placed the rating on CreditWatch with negative implications.

We also assigned a 'BBB-' rating to Mylan Inc.'s $1.6 billion senior unsecured term loan due 2017, and placed the rating on CreditWatch with negative implications.

In addition, we withdrew our 'BBB-' corporate credit rating on Mylan Inc. We initially placed our ratings on Mylan on CreditWatch with negative implications on April 9, 2015, and revised the CreditWatch twice as the terms of Mylan's pursuit of Perrigo changed.

Until Mylan gains a controlling interest in Perrigo, likely to be defined as a greater than 50% ownership stake, we will view Perrigo and Mylan independently. When and if a controlling stake is reached, we will view the companies on a combined basis, and focus on Mylan's pro forma leverage, integration plans, and ability to realize synergies. We will also be assessing the strategic importance of Perrigo to Mylan, and reviewing individual debt ratings in the event we do not consider Perrigo to be a core subsidiary.

"Our ratings on Mylan reflect expectations of leverage of 2.2x and funds from operations [FFO] to adjusted debt of about 30% by year-end 2015," said Standard & Poor's credit analyst Arthur Wong. In resolving the CreditWatch, we will consider how significantly Mylan's credit measures could stray from these expectations and how quickly the company is able to integrate, realize synergies, and de-lever to a level more consistent with investment-grade ratings.

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