Moody’s applies Baa2 to AbbVie notes

Moody's Investors Service said it assigned a provisional Baa2 rating to the proposed senior unsecured note offering of AbbVie Inc.

There are no changes to AbbVie's existing ratings, including the Baa1 senior unsecured long-term rating and the Prime-2 commercial paper rating.

The Baa1 senior unsecured long-term rating remains under review for downgrade, and

Moody's said it anticipates a rating outcome of Baa2 with a stable outlook at the conclusion of the rating review. At that time, the rating on the proposed note offering will be converted to Baa2 from provisional Baa2.

Proceeds will be used to pay the cash portion of AbbVie's pending acquisition of Stemcentrx, an accelerated share repurchase program related to the equity portion of the acquisition financing, and an upcoming debt maturity in November 2016.

"The anticipated rating outcome of Baa2 reflects our expectation that acquisitions are likely to result in debt/EBITDA sustained on average in the range of 3.0x - 3.5x, which is above the level incorporated in the Baa1 rating," Moody's senior vice president Michael Levesque said in a news release.

"In light of continuing revenue concentration in Humira, this degree of financial leverage positions AbbVie at the Baa2 rating level."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.