Moody's may cut Fresenius, units

Moody's Investors Service said it placed all ratings of Fresenius Medical Care AG and its parent Fresenius AG under review for possible downgrade following Fresenius' announcement that it has entered into a definitive agreement to acquire Renal Care Group, Inc.

On review are Fresenius Medical's Ba1 senior implied rating and issuer rating, FMC Trust Finance Sarl's Ba2 rated $225 million senior subordinated notes due 2011 and $200 million subordinated notes due 2011, Fresenius Medical Care Capital Trust II's Ba2 rated $450 million trust preferred securities due 2008, Fresenius Medical Care Capital Trust III's Ba2 Deutsche mark 300 million trust preferred securities due 2008, Capital Trust IV's Ba2 rated $225 million trust preferred securities due 2011 and Capital Trust V's Ba2 rated €300 million trust preferred securities due 2011.

Also on review are Fresenius AG's Ba1 senior implied rating, issuer rating and Ba1 rated €300 million senior notes.

Total consideration for the acquisition is $3.5 billion for Renal Care's equity and $500 million of assumed debt.

Concurrently, the ratings of Fresenius AG have also been placed under review as a result of the proposed acquisition of Renal Care Group and the proposed change in corporate legal structure of Fresenius Medical.

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