Canada-based pharmaceutical company Valeant made a hostile $5.7 billion bid for Cephalon Inc. that, if successful, will be entirely debt financed, substantially raising initial leverage from its current level, and excluding merger-related benefits, as well as contributions from recently closed acquisitions. We are placing Valeant on CreditWatch with negative implications given the still-developing nature of this transaction and the high leverage that will result if Valeant is successful in acquiring Cephalon. On March 30, 2011, Standard&Poor's Ratings Services placed all of its ratings on Mississauga, Ont.-based Valeant Pharmaceuticals International Inc., including the 'BB-' corporate credit rating, on CreditWatch with negative implications. Our ratings on Valeant reflect its fair business risk profile, which both a continued reliance on acquisitions
