NEW YORK--(BUSINESS WIRE)--Fitch Ratings does not expect any change to Thermo Fisher Scientific's (Thermo Fisher) ratings, including the 'F2' short-term Issuer Default Rating (IDR), due to the $500 million upsizing of the commercial paper (CP) program to $1.5 billion from $1 billion. The Rating Outlook is Stable. A full rating list is shown below. The ratings apply to $14.5 billion of debt.
Thermo Fisher's upsized CP program will have 100% external liquidity back-up through a $2 billion capacity revolving credit facility maturing July 2018, which has also been upsized from $1.5 billion to match the increase in the CP program. As of Dec. 31, 2014, there were no borrowings under the facility, although capacity was reduced by $59 million in letters of credit outstanding. If the company borrows under the facility, it intends to leave an amount undrawn sufficient to cover outstanding CP. At Dec. 31, 2014, there was no CP outstanding.
In addition to assessing external liquidity coverage of short-term debt obligations, Fitch's rating methodology for assigning short-term ratings to issuers with long-term IDRs of 'BBB' considers the company's sources of internal liquidity available to meet short-term debt obligations in the event external sources of liquidity are not available.
Considering the $500 million increase in the size of the CP program, Thermo Fisher's internal liquidity ratios remain adequate relative to the 'F2' rating. Furthermore, the company's operating profile is consistent with an 'F2' rating. Thermo Fisher has a well-known brand and product portfolio, and the cash flows do not exhibit a high degree of seasonality or working capital related swings.
DEBT ISSUE RATINGS
Fitch currently rates Thermo Fisher as follows:
--Long-term IDR and senior notes at 'BBB';
--Short-term IDR at 'F2';
--Commercial paper at 'F2'.
--Long-term IDR and senior notes at 'BBB'.
The Rating Outlook is Stable.
Additional information is available at 'www.fitchratings.com'.