MUMBAI (Thomson Financial) - Moody's Investors Service said it has lowered
the debt ratings of Hillenbrand Industries Inc to 'Baa3' from 'A3' based on the
pending spin-off of its Batesville casket division that is expected to occur on
Mar 31.
The outlook on the rating is negative.
Moody's said the downgrade reflects higher concentration risk associated
with the separation, loss of financial flexibility provided by the more stable,
higher margin casket business and the likelihood of a more aggressive
acquisition strategy for the remaining healthcare business.
Moody's said the company's 'Baa3' rating is more reflective of the company's
future capital structure. The rating also considers the company's leading market
position in its core acute care bed business and a relatively conservative
posture toward leverage in the past.
The negative outlook reflects concerns that this growth strategy -- combined
with working capital and competitive challenges -- may result in credit ratios
that no longer support an investment grade rating, Moody's added.
TFN.newsdesk@thomson.com
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