MUMBAI (Thomson Financial) - Moody's Investors Service said it has cut
Orthofix International NV and subsidiary Orthofix Holdings Inc's corporate
family rating and senior secured credit facility rating to 'B1' from 'Ba3',
concluding the review for possible downgrade initiated on Feb 14.
The downgrade primarily reflects materially lower operating and free cash
flow generation compared to Moody's expectations at the time of Orthofix's
acquisition of Blackstone Medical Inc in September 2006.
The review also reflects Moody's concerns regarding increased litigation
risk and appetite for acquisitions.
Further the 'B1' rating incorporates Moody's concerns regarding the
company's competitive position and its ability to execute on its stated strategy
of becoming a leader in the spine market.
The ratings outlook is negative, reflecting Moody's concerns that strategic
initiatives and the on-going integration of Blackstone, including potential
changes to the distribution network, could lead to operating disruptions in
2008.
The ratings are supported by the currently moderate financial leverage and
solid interest coverage of Orthofix, Moody's said.
TFN.newsdesk@thomson.com
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