Moody's may cut Allergan long-term ratings

Moody's Investors Service placed the long-term debt ratings of Allergan Inc. on review for possible downgrade following Allergan's announcement to acquire Inamed Corp. for about $3.2 billion in total consideration.

Ratings on review include the A3 senior unsecured debt rating and Baa1 subordinated debt rating. Moody's also affirmed Allergan's short-term debt rating at Prime-2.

The proposed $3.2 billion total consideration for Inamed is for 17.9 million of Allergan shares and $1.45 billion in cash, representing a 16% premium over an existing offer by Medicis Pharmaceutical Corp., based on Medicis' closing share price on Nov.14.

Moody's anticipates that the transaction's cash portion will be financed by a combination of debt and existing cash, which could materially affect Allergan's balance sheet strength and cash flow-to-debt metrics, and the cash portion of the offer price may increase before closing.

Moody's notes that the Inamed acquisition would help Allergan expand its aesthetics franchise by adding Inamed's existing and late-stage pipeline dermal filler and breast implant portfolios and anti-obesity product Lap-Band.

© 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.