S&P Affirms Ratings on Baxter Int'l (BAX) Pending Biopharmaceutical Unit Spinoff

Standard & Poor's Ratings Services said its ratings on Baxter Int'l (NYSE: BAX), including the 'A-' corporate credit rating, remain on CreditWatch with negative implications, pending the company's planned spin-off of its biopharmaceutical businesses.

"After the separation, Baxter's operations would include the businesses in its medical product segment (including the fluid systems, renal, biopharma solutions, and specialty pharmaceuticals businesses) and the biosurgery business. The transaction, if successfully completed, would result in a significantly smaller, less diversified, and lower EBITDA margin business for Baxter," said credit analyst David Kaplan. We expect to resolve the CreditWatch placement when Baxter provides more details regarding the company's new capital structure, and clarifies its financial policy and profitability, pro forma for the spin-off, including the effect of negative synergies.

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