PITTSBURGH, Nov. 20, 2012 /PRNewswire/ -- Mylan Inc. (Nasdaq: MYL) today reported that Moody's Investors Service ("Moody's") has upgraded the company's credit ratings to Baa3 from Ba1 and that Standard & Poor's Ratings Services ("S&P") has upgraded the company's credit ratings to BBB- from BB+.
Mylan also announced today that its Board of Directors has approved the repurchase of up to $500 million of the company's common stock in the open market or through other methods.
According to Moody's: "Mylan's Baa3 senior unsecured rating reflects its strong global position in generic pharmaceuticals, its robust growth outlook and the expectation that financial policies will be consistent with an investment-grade rating. Mylan has articulated a financial policy in which it does not expect leverage to exceed the covenant limits in its credit facility (currently 4.25 times) and in which deleveraging to 3.0 times would be accomplished within 18 months of acquisitions which resulted in a leverage increase. The rating also reflects Mylan's strong geographic diversification and its robust generic pipeline capabilities. Further, the rating is supported by favorable industry fundamentals based on the large number of branded pharmaceutical products facing patent expirations in the coming years as well as global demographic factors driving drug utilization."
According to S&P: "With a large global footprint and a full generic drug pipeline, Mylan is also well positioned to capitalize on the opportunities in the global generic space over the next three years... A broad product portfolio lessens the risk that any one product setback could significantly affect operations... [W]e believe that the company has the capacity to make a richly valued $4 billion acquisition within the context of the current rating."Mylan's Chief Financial Officer John Sheehan commented, "We are pleased that Moody's and S&P have each continued to recognize Mylan's long-standing commitment to financial discipline and a strong capital structure. We also are pleased by their recognition of Mylan's strong operating performance and ability to generate significant free cash flows. All of these factors have allowed us to accelerate our deleveraging, meet and exceed our long-term leverage target of 3.0 to 1, and achieve our current 2.6 to 1 leverage ratio. The agencies' upgrades of Mylan to investment grade credit ratings will only further enhance Mylan's financial flexibility and capacity to execute on our growth strategy." Sheehan continued, "The further enhancements to our financial flexibility provide Mylan with substantial capacity and a tremendous range of options to continue to maximize shareholder value. Not only does Mylan have the capacity to accelerate our long-term growth targets by executing on appropriate, strategic external opportunities, we also have capacity for additional share repurchase programs such as the one announced today."