S&P: Halyard view to negative

Standard & Poor’s said it revised the outlook on Halyard Health Inc. to negative from stable and affirmed its BB corporate credit rating.

The agency said the BB ratings and 3 recovery ratings on Halyard Health’s $390 million senior secured term loan and $250 million revolving credit facility are unchanged.

Also unchanged is the B+ rating on the company’s senior unsecured notes and recovery rating of 6.

The 3 recovery rating on the secured debt indicates 50% to 70% expected default recovery. The 6 recovery rating indicates 0 to 10% expected default recovery.

Halyard’s operating performance in the third quarter fell short of expectations as the company continues to face intense competition and pricing pressure, S&P said.

This outweighs the single-digit revenue growth in the higher-margin medical device segment, the agency said.

This deterioration in financial performance is leading to credit measures that are at the weak end of the range for the rating, S&P added.

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