S&P Global Ratings affirmed its BB- corporate credit rating on Amneal Pharmaceuticals LLC after the company's decision to merge with Impax Laboratories Inc.
The outlook remains negative.
S&P said the affirmation reflects the rating agency's view that the deal improves Amneal Pharmaceuticals' scale and diversity by adding specialty drugs to its business.
The rating agency said the outlook remains negative because the deal delays deleveraging given Impax Laboratories' higher leverage and it believes a transaction of this size raises integration risk.
S&P said the negative outlook also reflects its view that the pricing environment for generic drugs will remain challenging and takes into account Amneal's history of underperforming S&P's cash flow projections.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.