TEXT-S&P: ratings on Endo Health Solutions not affected
Aug 7 - Standard & Poor's Ratings Services said today that that all of its ratings on Chadds Ford, Penn.-based Endo Health Solutions, including the BB/Stable/-- corporate credit rating, are unchanged following Endo's announcement that it will implement a $450 million share repurchase program. We expect Endo to fund the program, expiring March 2015, through existing cash flow without compromising its ability to reduce debt. We expect free cash flow to increase modestly over the next 12 months and that the company's share repurchase program will be significantly less than our free cash flow expectation. Therefore, we expect the company to continue applying free cash flow to debt reduction so that leverage should decline to about 3x over the next 12 months. The rating on Endo reflects its "significant" financial risk profile (as per our criteria) and leverage of 3.4x as of March 31, 2012. The leverage results from higher debt incurred for the $4.1 billion of acquisitions completed over the past 18 months. We believe Endo has only a "fair" business risk profile, given franchise and product concentrations.
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