Assertio Therapeutics Inc. Ratings Affirmed, Taken Off UCO On Updated Ratios And Adjustments Criteria


  • We have completed our review of the ratings on Assertio Therapeutics Inc., which we placed under criteria observation (UCO) following the publication of our revised "Ratios And Adjustments," criteria on April 1, 2019.
  • Credit metrics improved slightly as a result of the revised criteria; however, our view of Assertio's underlying creditworthiness is unchanged.
  • We are affirming our ratings on the company, including our 'B' issuer credit rating, and removing the UCO designation.
  • The negative outlook reflects Assertio's need to refinance its debt over the next two years and our belief that refinancing risk is elevated given the company's exposure to opioid litigation and a number of product patent expirations expected in the 2022-2025 timeframe.
NEW YORK (S&P Global Ratings) April 15, 2019--S&P Global Ratings today took the rating actions listed above. Our ratings on Assertio reflect our updated expectation that adjusted leverage will generally remain in the 3x to 4x range, lower than our previous expectation of above 5x. This is because, under our updated criteria, we no longer adjust debt for the equity portion of convertible debt, which added an additional half turn of leverage. We also lowered our expectations for future business development because we do not believe the company will be able to execute a large, debt-financed acquisition with the current capital structure.
The negative outlook reflects the company's tight liquidity position given the heavy amortization requirement on its secured loans and the risk to our base case that the company will be able to refinance its debt successfully over the next 12 months. We expect adjusted leverage of about 4x at the end of 2019 and generally remaining in the 3x-4x range in the following years.
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