S&P rates Teva loan BBB+

Standard & Poor's said the ratings on Teva Pharmaceutical Industries Ltd., including the BBB+ corporate credit rating, remain on CreditWatch with negative implications pending the close of its planned $40.5 billion acquisition of the generics business of Allergan.

The agency said it initially placed the ratings on CreditWatch with negative implications in April 2015 and lowered the ratings to current levels in July 2015 and maintained the CreditWatch status.

S&P said it assigned a BBB+ rating to Teva's senior unsecured debt, which consists of a $4.5 billion revolver due 2020 and a $5 billion term loan, with tranches that are due 2018 and 2020.

The agency also said it placed those ratings on CreditWatch with negative implications.

S&P said it expects to lower the ratings to BBB and assign a stable outlook upon completion of the deal, which is expected to close in the first quarter of 2016.

Teva's proposed $40.5 billion acquisition of Allergan's generics unit strengthens its position in its core generic pharmaceutical business, adding additional size and scale, pipeline depth and increased geographic penetration, the agency said.

The acquisition also significantly increases debt leverage over the next several years, S&P said.

The agency said it will resolve the CreditWatch placement and lower the ratings upon the close of acquisition.

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