Fitch Affirms & Removes Cardinal Health from Rating Watch Negative.CHICAGO -- Fitch has affirmed and removed Cardinal Health <includeonly></includeonly> Cardinal Health (NYSE: CAH) is a premier, global healthcare company dedicated to making healthcare safer and more productive. Overview Headquartered in Dublin, Ohio, Cardinal Health, Inc. Inc.'s (CAH CAH congenital adrenal hyperplasia. CAH Congenital adrenal hyperplasia, see there ) ratings from Rating Watch Negative (where it was placed on May 14, 2007). The Rating Outlook is Stable: --Issuer default rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) 'BBB+'; --Senior unsecured credit facility 'BBB+'; --Senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. 'BBB+'; --Short-term IDR 'F2'; --Commercial paper 'F2'. The ratings apply to approximately $3.6 billion of debt. This action reflects the decreased uncertainty regarding the credit impact of CAH's acquisition of Viasys Healthcare. With 80% of the tender offer completed, the value of the transaction is expected to be approximately $1.5 billion. Fitch expects the transaction to be financed with $900 million of cash on hand and $600 million of recently issued senior unsecured debt. While the acquisition will increase leverage (total debt/EBITDA latest 12 months ending March 31, 2008) to approximately 1.4 times (x), Fitch believes CAH's financial and operational profile will remain supportive of a 'BBB+' rating. However, the increase in leverage reduces the company's flexibility within the rating category. Fitch believes the transaction is strategically sound, given CAH's manufacturing experience with medical products and a similar customer base among the two firms. Nevertheless, integration risk is present. At March 31, 2007, CAH had approximately $1.2 billion in cash, $3.2 billion of debt ($500 million maturing through 2010) and $1.25 billion availability on its $1.5 billion commercial paper program. For the latest 12 months at March 31, 2007, interest coverage (EBITDA/interest) was 18.7x, leverage (total debt/EBITDA) was 1.25x, and cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was $1.8 billion. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion