MUMBAI (Thomson Financial) - Moody's Investors Service said it affirmed
Israeli drugmaker Teva Pharmaceutical's 'Baa2' senior unsecured issuer rating
with a stable outlook and placed rival generic drug company Barr
Pharmaceuticals' ratings under review for possible upgrade.
The rating actions follow Teva's announcement that it will acquire Barr
Pharmaceuticals for about $7.46 billion plus about $1.5 billion of net debt.
The acquisition is expected to close by year-end 2008.
"Moody's affirmed Teva's investment grade rating because of sound strategic
rationale for acquiring Barr, significant equity funding and cushion in the
existing credit metrics," stated Michael Levesque, Moody's senior vice
president.
The stable rating outlook reflects Moody's assumption that Teva will
comfortably maintain key credit ratios within 'Baa' ranges. It also reflects
Moody's assumption that Teva will maintain sufficient liquidity to support its
short term obligations.
The rating review of Barr's senior unsecured credit facilities will focus on
the treatment of Barr's debt within Teva's corporate structure and the presence
of any support mechanisms.
At the close of the transaction, Moody's expects to withdraw Barr's 'Ba1'
corporate family rating, 'Ba1' probability of default rating and 'SGL-2'
speculative grade liquidity rating.
TFN.newsdesk@thomson.com
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