Research Update: Mallinckrodt PLC Ratings Placed On CreditWatch Positive On Expected Debt Repayment With Therakos Divestiture Proceeds

Specialty pharmaceutical company Mallinckrodt PLC recently announced the sale of its Therakos business for about $925 million. The company intends to use the net proceeds from the sale to repay all of its first-out, first-lien term loan and over $500 million of its outstanding second-out, first-lien term loan and second-out, first-lien notes on a pro-rata basis. Despite the loss of one of its specialty brands segment's top-three revenue and EBITDA contributors, S&P Global Ratings views the reduction in Mallinckrodt's debt as net-credit positive. We placed our issuer credit rating on Mallinckrodt and our issue-level ratings on its second-out notes and second-out term loan on CreditWatch with positive implications. Our issue-level rating on the company's first-out, first-lien term loan is unaffected

... PLC recently announced the sale of its Therakos business for about $925 million. The company intends to use the net proceeds from the sale to repay all of its first-out, first-lien term loan and over $500 million of its outstanding second-out, first-lien term loan and second-out, first-lien notes on a pro-rata basis. - Despite the loss of one of its specialty brands segment's top-three revenue and EBITDA contributors, S&P Global Ratings views the reduction in Mallinckrodt's debt as net-credit positive. - We placed our issuer credit rating on Mallinckrodt and our issue-level ratings on its second-out notes and second-out term loan on CreditWatch with positive implications. Our issue-level rating on the company's first-out, first-lien term loan is unaffected because we expect it will repay the loan once it completes the sale. - We expect to resolve the CreditWatch placement when the Therakos sale closes and Mallinckrodt uses the proceeds to...

Research Update