TEXT-S&P rates McKesson Corp. proposed notes 'A-'

Thu Nov 29, 2012 12:15pm EST

Nov 29 - Standard & Poor's Ratings Services said today that it assigned
U.S.-based medical products and pharmaceutical distributor McKesson Corp.'s
 proposed senior unsecured notes offering its 'A-' issue-level rating.

The notes will be issued in two tranches, and terms of the proposed notes, 
including maturities, amounts, and rates, will be determined by market 
conditions. The notes will rank equally with the company's existing and future 
unsecured and unsubordinated indebtedness. McKesson will use the proceeds from 
the notes to prefund the repayment of its $500 million 5.25% notes due March 
1, 2013, and replenish working capital. The additional debt is not sufficient 
enough to alter our ratings or outlook on the company, and is in line with our 
expectations for the company's long-term capital structure.

The ratings on McKesson reflect Standard & Poor's Ratings Services' assessment 
of the company's business risk profile as "satisfactory" given the company's 
leading position in a very stable industry and its financial risk profile as 
"modest" given its strong credit metrics and exceptional liquidity. 
Furthermore, we believe that the pending $2.1 billion acquisition of PSS World 
Medical Inc. is a logical extension of McKesson's existing medical products 
distribution business, and we do not expect McKesson to breach or operate 
above our previously published threshold for a "modest" financial risk profile 
of 2x debt to EBITDA for an extended period of time. 


RELATED CRITERIA AND RESEARCH
     -- Business Risk/Financial Risk Matrix Expanded, May 27, 2009
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
     -- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008 
 
RATINGS LIST

Ratings Unchanged

McKesson Corp.
 Corporate Credit Rating             A-/Stable/A-1

New Ratings
McKesson Corp.
 Senior Unsecured Notes              A-


Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.