OREANDA-NEWS. S&P Global Ratings today assigned its 'BBB' issue-level rating to Thermo Fisher Scientific Inc.'s €1.6 billion Euro-denominated senior unsecured note offering that includes two tranches due 2024 and 2028. The company will use proceeds to fund the FEI Co. acquisition announced in May 2016, expected to close by the end of 2016.

Our current ratings on Thermo Fisher, including the 'BBB' corporate credit rating, continue to reflect our expectation that the company will generate over $2.5 billion in discretionary cash flow in 2016, improving to around $3 billion in 2017, and that leverage will remain within the 3.0x-4.0x range over the next few years, pro forma for the pending FEI Co. acquisition and assuming the company remains moderately acquisitive.

Our assessment of Thermo Fisher's business risk continues to reflect the company's significant scale as the largest provider of analytical instruments, equipment, and reagents for the research market, with a large distribution network. The company also benefits from a diverse presence across geographies and customers, an ability to retain market leadership through modest organic growth, and a successful execution of acquisitions that support core business strengths.

For the corporate credit rating rationale, see the summary analysis on Thermo Fisher Scientific published on June 22, 2015.