Dec 12 - Standard & Poor's Ratings Services said today that its ratings on
Warsaw, Ind.-based medical products manufacturer Biomet Inc. are not affected by
the company's intention to add on $250 million of debt to its existing extended
term loan due July 2017. The company will use proceeds from the add-on to retire
a like amount of the company's term loan facility due March 2015. The amounts of
senior secured and total debt will be essentially unchanged, thus the
transaction does not affect our ratings.
The ratings on Biomet reflect the company's "satisfactory" business risk
profile and "highly leveraged" financial risk profile, according to our
criteria. Biomet's satisfactory business risk profile reflects pricing
pressure and the company's somewhat narrow focus in the orthopedic industry,
in addition to the relatively stable nature of its industry, Biomet's
relatively full orthopedic product offerings, and favorable long-term volume
trends. The financial risk profile and corporate credit rating reflect our
expectations for minimal debt reduction, funds from operations (FFO) to total
debt between 5% and 10%, and debt to EBITDA to remain more than 5x.