S&P Downgrades CVS After News of Bond Sale
By Imani Moise
Standard & Poor's Global Ratings downgraded CVS Health Corp.'s (CVS) debt rating to one notch above non-investment grade after the pharmacy operator announced plans to sell $44 billion in bonds to fund its $69 billion acquisition of Aetna Inc. (AET).
The offering marks the largest bond sale in more than two years.
The ratings firm lowered CVS's position to BBB from BBB+, saying that the company's financial risk profile will weaken considerable from the substantial increase in debt. The firm said CVS's outlook is stable as it expects the company to pay down some debt.
According to the S&P website, debt rated BBB has sufficient protection parameters but "adverse economic conditions or changing circumstances are more likely to weaken the obligor's capacity to meet its financial commitments on the obligation."
Shares fell 0.8% to $67.76 during morning trading and have fallen 16% over the past year.
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(END) Dow Jones Newswires
March 06, 2018 10:30 ET (15:30 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.