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Bond Market News
Teva Pharmaceuticals Upgraded to BB+ by S&P
December 23, 2025
Teva Pharmaceuticals was upgraded by a notch to BB+ from BB by S&P, with a stable outlook. The move reflects a clearer deleveraging trajectory, with S&P-adjusted leverage of about 4.4x expected to fall below the 4.25x threshold in the coming quarters. S&P expects modest EBITDA growth in 2026–27 even after headwinds from lenalidomide competition and Medicare Part D discounts on Austedo. The rating agency highlights the management’s long-standing focus on balance sheet repair and still expects the bulk of roughly $2bn of annual free cash flow to be directed toward debt reduction and legal settlement payments. S&P’s leverage metric also includes securitization facilities and opioid-related legal liabilities, adding around 1.1x of incremental leverage. Liquidity is viewed as adequate following the extension of Teva’s $1.8bn revolver to April 2028. Teva’s scale, leading generics position, diversified earnings mix and EBITDA margins are said continue to underpin its upgraded rating.
Its 5.125% 2029s are trading stable at 100.9, yielding 4.82%.
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