(The following statement was released by the rating agency)
May 16 - Standard & Poor's Ratings Services said today that it assigned its 'A-' issue-level rating to Warsaw, Ind.-based orthopedic products maker Zimmer Holdings Inc.'s $1.35 billion senior unsecured revolving credit facility maturing May 9, 2017. At the same time, we withdrew our 'A-' senior unsecured debt rating on the company's $1.35 billion revolving credit facility (set to mature on Nov. 30, 2012), which was replaced. The new revolver will include a 3x maximum leverage covenant but will not include an interest coverage covenant as did the previous revolver. The rating on Zimmer reflects the company's "satisfactory" business risk profile, which is a function of its leading market positions, offset by product concentration. The rating also reflects the company's "minimal" financial risk profile, given Zimmer's conservative financial policies and strong credit metrics. We expect roughly 3% constant currency revenue growth in 2012, in line with our mid-single-digit 2012 growth expectations for the orthopedic device manufacturers. Our projections assume a 1%-2% price decline in 2012 and beyond, offset by volume growth and some market-share gain. We expect pricing pressures to reduce margins slightly in 2012, and the 2.3% new medical device will create a further headwind in 2013. We believe cost-saving initiatives and higher volumes, in part from the recovering economy, could result in stable to improving margins in 2014 and beyond. Zimmer's volumes should improve given the aging population and the potential for catch-up volumes from previously delayed surgeries. (For the complete corporate credit rating rationale, see the full analysis on Zimmer Holdings, published April 17, 2012, on RatingsDirect.) RELATED CRITERIA AND RESEARCH
-- Business Risk/Financial Risk Matrix Expanded, May 27, 2009
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
-- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008 RATINGS LIST Zimmer Holdings Inc. Corporate credit rating A-/Stable/-- Rating Assigned Zimmer Holdings Inc. Senior Unsecured $1.35 bil. revolver due 2017 A- Rating Withdrawn
To From Zimmer Holdings Inc. Senior Unsecured revolver NR A- (Caryn Trokie, New York Ratings Unit)
Our top photos from the last 24 hours.