Moody’s: Novartis view to negative

Moody's Investors Service said it changed the outlook on Novartis AG to negative from stable.

The agency also said it affirmed the company’s Aa3 long-term ratings and the ratings on its guaranteed subsidiaries.

The outlook revision follows news that the company will conduct an up to $5 billion debt-funded share buyback program in 2017, Moody’s said.

The planned share buyback exceeds the company's free cash flow and will be financed solely through debt, the agency said.

The buyback puts further strain on the company's credit metrics, which were already weak for the Aa3 rating category, Moody’s said.

Beyond 2017, the agency said it believes that free cash flows will increase as generic headwinds ease and revenues from recently launched products continue to increase.

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