Moody’s rates Thermo Fisher bond Baa2

Moody's Investors Service said it assigned a Baa2 rating to the recently issued $1.2 billion senior unsecured bond due 2026 of Thermo Fisher Scientific Inc.

Proceeds will be used to refinance upcoming maturities of existing debt.

The outlook is stable.

Moody’s said the Baa2 rating is supported by Thermo Fisher's significant scale and leading market position in the life science industry.

The rating also reflects the stability of the company's revenue and cash flow. The agency said that this stability is due to its product and end-user market diversity, as well as from the recurring and predictable nature of about two-thirds of revenue, which is generated from the sale of consumables and services.

As a result, revenues and cash flows are relatively resilient in the face of economic downturns.

Additionally, the rating reflects Thermo Fisher's strong free cash flow and track record of debt repayment following significant acquisitions, the agency explained. With debt/EBITDA of roughly 3.4 times, Thermo Fisher's financial leverage is moderate. Moody's said it expects leverage to remain relatively flat over the next 12 months.

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