Gediminas Jasionis

Boston Scientific Corporation (NYSE: BSX) slowly heading towards improvement

by Gediminas Jasionis May 20, 2009
bostonscientific-logo.jpgBoston Scientific Corporation (NYSE: BSX) stock has shown some improvement Wednesday's trading session, as the company's Issuer Default Rating (IDR) improved on Tuesday. Fitch Ratings, an international rating agency, has confirmed that Boston Scientific meets the requirements for bare a BB+ rating on their Senior unsecured notes and unsecured bank credit facility.

This rating improvement means the company has been making significant progress in their business. Boston Scientific has also managed to eliminate $1.3 billion of debt during 2008, which has proven the company's ability to cover their obligations. The company's leverage has decreased from 3.3 at the beginning of 2008 to 2.6 at the beginning of 2009. If they can continue on the same path, leverage reduction could lead to further improvement in the IDR rating.

Fitch Ratings has outlined Boston's progress in its drug-eluting stent and cardiac rhythm management businesses. Boston has presented new products, resolved regulatory issues and is currently setting their focus on increasing different product related profit margins. Boston has nearly completed restructuring which should provide lower operating costs in the future.

The company has managed to minimize their losses to $13 million over the first quarter of 2009. The loss and repayment of debt has reduced their cash reserves significantly. However, according to Fitch, Boston should be able to repay the $325 million debt, maturing in 2010, without any issues. The more significant $3.75 billion debt, maturing in 2011, can only be expected to be partially covered and refinanced though.

Reference:

Detailed overview BSX possition

 

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