Boston, MA 06/03/2014 (wallstreetpr) – The largest PBM (Pharmaceutical benefit management) as well as the third-largest U.S. based pharmacy operator, Express Scripts Holding Company (NASDAQ:ESRX) declared that Fitch Rating has given ‘BBB’ rating to the proposed senior unsecured bond of the company.
Express assigned to ‘BBB’ rating:
Express, on June 2, 2014 stated ‘BBB’ rating has been assigned to the company by Fitch Rating.Express Scripts Holding Company (NASDAQ:ESRX) also mentioned that the profit from the issuance will be used for the recovery of the company’s unsecured bond of $900 million and $1.25 billion, which is due on November 2014 and November 2016 respectively. It will also be used for ‘general corporate purpose,’ including repurchase of some shares.
Express’s IDR is currently rated ‘BBB’ with a ‘Stable Rating Outlook’ by Fitch. However, the bonds will be further guaranteed by two other issuing bodies of Express. Medco Health Solutions Inc and Express Scripts Inc are those issuing bodies.
The stable and robust cash flows of Express Scripts Holding Company (NASDAQ:ESRX) are driven by sturdy working capital management as well as efficient operation, in spite of comparatively lower margins. In 2014, the FCF (free cash flow) forecasted by Fitch is nearly $4.4 billion. However, due to firm liquidity profile and sturdy cash flows the company stands at upper end of ‘BBB’ range.
Decline in the expected first quarter earnings:
On May 29, 2014 the leading pharmacy company confessed that it missed its expected first quarter earnings due to unfavorable weather. The company has downsized its 2014 forecast.
The net income of Express Scripts Holding Company (NASDAQ:ESRX) slipped down from $373 million or 45 cents per share to $328.3 million or 42 cents per share within a year. The company that received approximately 1 billion of prescriptions last year also mentioned a lesser number this quarter. Express stated that the decline in the earnings took place mainly due to prescribed drug volumes, severe weather effect and enrolment of a lesser number of patients.