Research Update: LifeScan Global Corp. Issuer Credit Rating Lowered To 'B' From 'B+' On Revenue Decline Acceleration; Outlook Negative

LifeScan Global Corp., a blood glucose monitoring (BGM) devices manufacturer, underperformed our expectations in the first half of 2019 primarily as a result of market share loss in the U.S. both to the newer competing technology--constant glucose monitoring (CGM)--and within its core BGM category. In addition, the company faces various unfavorable conditions in other international markets. We believe the company's competitive position has weakened and we expect these headwinds to persist into 2020. We now project more rapid revenue declines, and our adjusted leverage measure rising to around 5x in 2019-2020, in contrast to our previous expectations of about 4x. We believe leverage will remain at these levels helped by progress in implementing the company's cost-saving plan, and by the

...- LifeScan Global Corp., a blood glucose monitoring (BGM) devices manufacturer, underperformed our expectations in the first half of 2019 primarily as a result of market share loss in the U.S. both to the newer competing technology--constant glucose monitoring (CGM)--and within its core BGM category. - In addition, the company faces various unfavorable conditions in other international markets. We believe the company's competitive position has weakened and we expect these headwinds to persist into 2020. - We now project more rapid revenue declines, and our adjusted leverage measure rising to around 5x in 2019-2020, in contrast to our previous expectations of about 4x. We believe leverage will remain at these levels helped by progress in implementing the company's cost-saving plan, and by the high level of mandatory debt amortization. - We are lowering our issuer credit rating on LifeScan to 'B' from 'B+'. The outlook is negative. We are also lowering our issue-level ratings on the company's...

Research Update