Bristol-Myers Squibb Co.'s Senior Unsecured Notes Rated 'A+'; New Issue Ratings Placed On CreditWatch Negative

NEW YORK (S&P Global Ratings) April 17, 2019--S&P Global Ratings today assigned its 'A+' issue-level rating to New York City-based pharmaceutical company Bristol-Myers Squibb Co.'s proposed senior unsecured notes and placed them on CreditWatch with negative implications.
Bristol-Myers is seeking to exchange the proposed notes for $19.85 billion of outstanding public debt at Celgene Corp., mirroring the Celgene notes in terms of principal amount, interest rate, and maturity date. The proposed notes are contingent on Bristol-Myers successfully closing its acquisition of Celgene. The exchange is offered to all of Celgene's outstanding debt except for Celgene's $500 million of senior notes due 2019, which mature in May 2019. Following the close of the acquisition of Celgene, expected in the third quarter of 2019, we will resolve the CreditWatch listing on all ratings on Bristol-Myers.
Based on the proposed financing terms and assuming no significant changes in financial policy or operating performance, we expect to lower the issuer credit rating on Bristol-Myers to 'A' from 'A+' and assign a stable outlook at the close of the acquisition.
We would expect to rate Bristol-Myers' existing notes, the proposed notes, and any acquisition-related debt issued by Bristol-Myers 'A', with no adjustments for structural subordination upon close. Although unexchanged Celgene debt would be structurally senior relative to Bristol-Myers' debt (existing, acquisition related, and proposed exchange notes), we expect remaining Celgene notes will total less than 50% of the total debt outstanding post-close, and as such, in our opinion, there will be no meaningful structural subordination issues.
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