Pfizer Inc.'s Senior Unsecured Debt Issuance Rated 'AA'
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NEW YORK (S&P Global Ratings) March 4, 2019--S&P Global Ratings today assigned
its 'AA' issue-level rating to Pfizer Inc.'s senior unsecured notes. We expect
the company will likely issue several tranches maturing in 2022, 2024, 2029,
2039, and 2049. We expect the company to use the proceeds primarily to
refinance and redeem existing debt, including repaying a portion of its
outstanding commercial paper, and finance general corporate activities. We
expect this transaction will be neutral to Pfizer's leverage.
Our 'AA' long-term issuer credit rating on New York City-based pharmaceutical
giant Pfizer reflects the company's significant scale, strong market position,
and diverse portfolio of high-margin pharmaceuticals, with particular
strengths in neurology, oncology, and vaccines. Pfizer's portfolio faces
pressure from some patent expirations on Lyrica, in June this year in the
U.S., and from declines in Enbrel stemming from competition from biosimilars
outside North America. However, we expect growth in newer products should more
than offset these headwinds, supporting modest annual total revenue growth
(1%-2%) for the next two years. Still, given the sheer size of Pfizer's
portfolio, pressure remains on its current portfolio and pipeline to generate
significant future sales and earnings growth, especially in light of more
aggressive pricing by managed care and pharmacy benefit managers. In the
meantime, Pfizer maintains a very conservative financial profile. Despite
being acquisitive in the past, we expect Pfizer's long-term leverage ratio to
remain below 2x.
