OREANDA-NEWS. S&P Global Ratings today assigned its 'BBB' issue-level rating to Thermo Fisher Scientific (Finance I) B. V.'s €600 million Euro-denominated senior unsecured note offering due 2018. The new notes will be fully guaranteed by the parent, Thermo Fisher Scientific Inc., and the proceeds will be used to repay the remaining balance on the term loan issued to fund the Affymetrix acquisition in March 2016.

We consider the borrowing subsidiary, Thermo Fisher Scientific (Finance I) B. V., to be an integral part of parent Thermo Fisher Scientific Inc. For this reason, we view the subsidiary to be a "core" entity of Thermo Fisher Scientific Inc. and view the credit risks to be the same between the two entities.

Our current ratings on parent Thermo Fisher, including the 'BBB' corporate credit rating, continue to reflect our expectation that the company will generate over $2.5 billion in discretionary cash flow in 2016, improving to around $3 billion in 2017, and that its leverage will remain within the 3.0x-4.0x range over the next few years, pro forma for the pending FEI Co. acquisition and assuming the company will remain moderately acquisitive going forward.

Our assessment of Thermo Fisher's business risk continues to reflect the company's significant scale as the largest provider of analytical instruments, equipment, and reagents for the research market, with a large distribution network. The business risk also benefits from a diverse presence across geographies and customers, an ability to retain market leadership through modest organic growth, and a successful execution of acquisitions that support core business strengths.

For the corporate credit rating rationale, see the summary analysis on Thermo Fisher published June 22, 2015.