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TEXT-S&P rates Metronic snr unsecured debt 'A+'
March 14, 2012 / 4:22 PM / 6 years ago

TEXT-S&P rates Metronic snr unsecured debt 'A+'

March 14 - Standard & Poor's Ratings Services said today that it assigned
its 'A+' rating to Minneapolis-based medical device manufacturer Medtronic
Inc.'s senior unsecured debt securities, drawn from a Rule 415 shelf
registration. The company will issue two tranches 	
of 10 and 30 years, for a yet to be determined amount. 	
	
Our 'A+' long-term and 'A-1+' short-term ratings, along with the stable rating 	
outlook, on Medtronic remain unchanged and reflect the company's "strong" 	
business risk profile and "modest" financial risk profile (according to our 	
criteria). Contributing to Medtronic's strong business risk profile is its 	
significant scale (over $16 billion revenues) and product diversity. Geography 	
is also diverse--in 2011, 45% of sales were generated outside the U.S. We 	
expect near-term revenue growth to be in the low-single-digit area. 	
Stabilization in CRDM and spinal sales could stem the drag on total revenue 	
growth, and provide better-than-expected performance. 	
	
Medtronic should be able to drive more meaningful revenue growth in the medium 	
term as a result of acquisitions, ongoing product launches, and geographic 	
expansion. We expect a stable EBITDA margin over the next few years, as 	
restructuring efforts offset the implementation of the legislated medical 	
device tax (2.3% of U.S. device revenues) on Jan. 1, 2013. Medtronic's modest 	
financial risk profile is evidenced by under 2x adjusted debt leverage, very 	
strong cash flow generation, and conservative financial policies. Liquidity is 	
exceptional; substantial internally generated cash and access to external 	
capital mitigates immediate competitive, technological, and litigation issues. 	

RATING LIST	
	
Medtronic Inc.	
	
 Corporate credit rating           A+/Stable/A-1+	
	
Rating Assigned	
	
Medtronic Inc.	
 Senior Unsecured	
  10- and 30-year nts              A+

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