S&P upgrades Mead Johnson notes to A-

S&P said it raised all issue-level ratings on Mead Johnson Nutrition Co.'s senior unsecured notes to A- from BBB and removed the ratings from CreditWatch, where they were placed with positive implications on Feb. 3.

The action reflects the agency’s opinion that the guarantee provided by Reckitt Benckiser Group plc (A-/stable/A-2) on this debt meets the criteria for credit substitution, including that the guarantee is unconditional, one of payment (not collection) and reinstates if recaptured in a guarantor bankruptcy scenario.

S&P expects Reckitt Benckiser to acquire Mead Johnson on or around June 15, for about $17.9 billion, including assumed debt.

The company’s BBB+ corporate credit rating is unchanged.

The outlook is stable.

Debt outstanding was about $3 billion as of March 31.

S&P said it views Mead Johnson as a highly strategic subsidiary of Reckitt Benckiser, and applies a one-notch uplift to the bbb stand-alone credit profile (SACP) in arriving at the BBB+ corporate credit rating.

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