S&P Global Ratings affirmed Boston Scientific Corp.'s ratings while revising the outlook to stable from positive after the company revised its revenue outlook for the first quarter on the expected impact from the coronavirus pandemic.
S&P Global Ratings affirmed Boston Scientific's BBB- long-term issuer credit and unsecured debt ratings as well as the company's A-3 short-term rating.
S&P Global Ratings said the outlook revision takes into account its belief that the company's relatively high exposure to deferrable procedures will result in a significant impact on operating performance in the first and second quarters of 2020.
Marlborough, Mass.-based Boston Scientific develops, manufactures and markets medical devices for use in various interventional medical specialties worldwide. The company also offers interventional cardiology products.
The rating agency estimates that about 70% of the company's portfolio is susceptible to procedures that are being postponed due to the pandemic. The agency expects the delays in elective procedures to extend into the second quarter, having a significant negative impact on the company's operating performance.
S&P Global Ratings said the impact on operating performance may result in leverage remaining at or above 4x in 2020, but it believes the strong growth prospects of Boston Scientific's product portfolio will help maintain leverage below 4x in the long term.
The agency's stable outlook represents its view that Boston Scientific's cost reduction and cash preservation measures will help contain COVID-19's impact in 2020.
S&P Global Ratings said it expects some volume stabilization in the third quarter, noting that many cardiovascular and diagnostic procedures cannot be deferred by more than one or two months. However, the agency expects that a negative impact on operating performance for several months will delay leverage reduction from the 2019 level of 4.1x.
Globally, COVID-19 — the disease caused by the 2019 coronavirus — has infected more than 1 million people and caused over 56,700 deaths as of April 2, according to data from Johns Hopkins University's Center for Systems Science and Engineering.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.