Ireland-based Mallinckrodt PLC announced its intention to divest its specialty generic pharmaceutical business via a tax-free spin-off, with the current rated entity maintaining the specialty branded pharmaceutical business. The resulting capital structure is uncertain, but we expect a meaningful reduction in gross debt at the rated entity. Post the spin, the company will be less diverse with potentially similar or higher debt leverage at close. We are placing the issuer credit rating on Mallinckrodt on CreditWatch with negative implications and all issue-level ratings on the company on CreditWatch with developing implications. The CreditWatch placement follows Mallinckrodt's announcement that it intends to divest its specialty generics business (including branded constipation drug Amitiza) via a tax-free spin-off. The company previously announced its
