Mallinckrodt PLC 'CCC' Rating Affirmed And Removed From CreditWatch; Outlook Negative

Global pharmaceutical company Mallinckrodt PLC recently announced an unfavorable ruling in its litigation with Centers for Medicare and Medicaid Services (CMS) and Health and Human Services (HHS), potentially owing $650 million and losing annual revenue of $90 million-$100 million. Mallinckrodt no longer expects to complete its recently proposed term loan, but it is seeking other refinancing alternatives. The unfavorable ruling could also jeopardize Mallinckrodt's agreement-in-principle to resolve its opioid litigation because of certain legal contingencies in the settlement. We now believe the company's default risk is higher over the next 12 months, considering the elevated refinancing risk associated with the April 2020 debt maturity of $615 million. We are affirming the 'CCC' long-term issuer credit rating and removing the rating

...March 19, 2020 - Global pharmaceutical company Mallinckrodt PLC recently announced an unfavorable ruling in its litigation with Centers for Medicare and Medicaid Services (CMS) and Health and Human Services (HHS), potentially owing $650 million and losing annual revenue of $90 million-$100 million. - Mallinckrodt no longer expects to complete its recently proposed term loan, but it is seeking other refinancing alternatives. - The unfavorable ruling could also jeopardize Mallinckrodt's agreement-in-principle to resolve its opioid litigation because of certain legal contingencies in the settlement. - We now believe the company's default risk is higher over the next 12 months, considering the elevated refinancing risk associated with the April 2020 debt maturity of $615 million. - We are affirming the '###' long-term issuer credit rating and removing the rating from CreditWatch. We are also lowering the senior unsecured issue-level rating to '##' with a recovery rating of '6'. - The negative...

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