(Bloomberg)– Johnson & &Johnson, among the last United States business with leading credit report scores, goes to threat of shedding its AAA quality from S&P Global Ratings after the manufacturer of medicines and clinical tools stated it was obtaining Intra-Cellular Therapies Inc
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S&P stated on Tuesday that it’s examining whether it needs to reduce the firm’s credit report scores, partially since the $14.6 billion procurement would certainly improve J&J’s debt. J&J will most likely make even more debt-funded purchases in the future, according to S&P.
A downgrade for J&J would certainly leaveMicrosoft Corp as the only United States firm ranked AAA. Seven companies internationally– consisting of banks– have an AAA ranking from S&P, according to an agent with the scores firm. That’s below 16 a years back and 88 in 2005. The existing listing consists of Temasek Holdings, Public Sector Pension Investment Board and Airservices Australia.
Ratings declines can improve a business’s loaning prices, although when it comes to business in the highest possible scores rates, any kind of distinction might be very little.
On Monday, J&J stated that it’s moneying the Intra-Cellular Therapies acquisition with money and financial debt. It anticipates to shut on the bargain this year.
Separately, Moody’s Ratings on Tuesday verified J&J’s existing AAA ranking. Johnson & & Johnson has “cash-on-hand of over $20 billion as well as very strong annual free cash-flow generation,” according to the bond-grading company.
–With help from Ethan M Steinberg.
(Updates to include context on variety of business ranked AAA by S&P in the 3rd paragraph.)
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