OREANDA-NEWS. S&P Global Ratings today assigned its 'A' rating to Amgen Inc.'s announced offering of senior unsecured U. S.-dollar-denominated notes, to be issued in four tranches. The company will use proceeds from the issuance to refinance its senior notes maturing in 2017, to repurchase shares of common stock, and for general corporate purposes.

The transaction does not affect our 'A' corporate credit and senior unsecured debt ratings on Amgen because the expected leverage at the end of the transaction will remain materially the same, the company has substantial leverage cushion, and maturities will be extended out. Our overall assessment of Amgen's business and prospects also is unchanged because its performance has remained steady and is in line with our expectations, with high-single-digit revenue increases and adjusted EBITDA margins that have grown to over 50%. Longer term, we believe the company is seeking to expand its portfolio and product pipeline; sales of its older core products (Epogen/Aranesp, Neupogen/Neulasta, and Enbrel) are gradually declining as they lose patent protection and biosimilar competition emerges. However, we believe the decline will be gradual, and sales of newer products should be able to largely offset the impact.

Large debt-financed acquisitions remain a distinct possibility; we incorporate about $15 billion of debt capacity at the current rating.

For the corporate credit rating rationale, see the summary analysis on Amgen published Feb. 17, 2016.

For a discussion on Amgen, see our latest episode of our podcast show, The S&P Pharma Dose, see the podcast released on May 5, 2016.