Fitch to give BBB- to Mylan notes

Fitch Ratings said it expects to assign BBB- ratings to Mylan Inc.'s proposed offering of new euro-denominated senior unsecured notes due 2025.

The notes will be guaranteed on a senior unsecured basis by its indirect parent holding company Mylan, NV.

Net proceeds will be used to repay, prepay, redeem or otherwise refinance debt of Mylan NV or any of its subsidiaries and to pay fees and expenses.

The outlook is stable. The ratings apply to about $15 billion of debt at March 31, 2017.

“Mylan is in the process of deleveraging from the partly debt-financed acquisition of Meda in August 2016,” Fitch said in a news release.

“The company's diverse product portfolio, which benefits from relatively reliable demand and generally defensible margins, should drive consistently positive free cash flow of approximately $2 to 2.5 billion in 2018.

“Fitch expects Mylan will pay down sufficient debt to reduce gross leverage (total gross debt/EBITDA) to approximately 3.5x by year-end 2018.”

The agency added that it anticipates that Mylan will likely maintain an acquisitive posture over the medium- to long-term, focusing on targets that improve the breadth and depth of the existing portfolio or adjacent opportunities, which may result in leverage rising temporarily above the 4 times level.

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