American Home Prods & Related Ents Rtgs Raised;Off S&PWatch.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 7/14/97-- Standard & Poor's today has raised its ratings on American Home For the American mortgage lender, see . The American Home is a center of intercultural exchange located in Vladimir, Russia. The home is designed to model a typical American suburban home and its main focus is the ESL school that provides lessons for Russian students. Products Corp. and related entities as indicated in the list below. These ratings have been removed from CreditWatch, where they were placed in December 1996. At the same time, a single-'A' bank loan rating has been assigned to AHP's $6 billion unsecured credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities . These actions reflect the progress made in reducing debt and improving cash generation since Madison, N.J.-based AHP's 1994 $10 billion debt-financed acquisition of American Cyanamid American Cyanamid was a large, diversified, American chemical manufacturer. Lederle Laboratories, maker of Centrum and Stresstabs vitamins, was Cyanamid's pharmaceutical division. Davis & Geck was the company's medical device division. Co. Through a series of divestitures and strong internal cash generation, approximately $3.7 billion of debt has been repaid over the last two years. This result has been achieved while the company continued to bolster its core health care franchises with acquisitions totaling $960 million over this same period. The pace of these acquisitions is more moderate than had been anticipated, given the dramatic consolidation of the pharmaceutical industry at that time. The acquisition of Cyanamid cy·an·am·ide also cy·an·am·id n. 1. A caustic acidic crystalline compound, NHCNH, prepared by treating calcium cyanamide with sulfuric acid. 2. Calcium cyanamide. Noun 1. broadened AHP's prescription pharmaceutical, over the counter (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). ), and medical device franchises, while adding an unrelated crop protection business. Since the purchase, this focus on health care operations has been sharpened through the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the Kolynos-brand toothpaste franchise, 80% of a foods business, and several smaller units. Operating results have steadily improved over this period, as substantial cost savings have been realized through the rationalization of manufacturing, marketing, and research operations. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: have risen to over 28% in the first quarter of 1997 from 24% in 1994. Given the limited capital needs of these businesses, this operating improvement has led directly to stronger excess cash generation. Credit measures reflect these operational and franchise initiatives: debt leverage, net of cash, has fallen to 43% from over 65% at the end of 1994 while funds flow to net debt has grown to 47% from 21% over the same period. This improvement markedly exceeds that anticipated by Standard & Poor's when Cyanamid was purchased. OUTLOOK: Positive. A broadening base of new prescription pharmaceutical products and the moderate use of debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay suggest that, over the next few years, debt reduction should continue, setting the stage for additional ratings improvement. -- CreditWire -0-
RATINGS RAISED AND REMOVED FROM CREDITWATCH
Rating
To From
American Home Products Corp. (AHP)
Corporate credit rtg A A-
Senior unsecd debt A A-
CP A-1 A-2
Robins (A.H.) Co. Inc.
CP (gtd: AHP) A-1 A-2
Sherwood Medical Co.
CP (gtd: AHP) A-1 A-2
AC Acquisition Holding Co.
CP A-1 A-2
RATING ASSIGNED
Rating
American Home Products Corp.
Bank ln rtg A
-0- CONTACT: David Lugg, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (1) 212-208-1348 |
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