Moody's rates Alvogen loan B3

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to Alvogen Pharma US, Inc. and a B3 (LGD3, 49%) rating to its proposed $225 million senior secured term loan B. The outlook is stable

The agency said Alvogen's B3 corporate family rating reflects its modest size and scale within the highly competitive generic pharmaceutical industry, its high dependence on a relatively few number of products for revenue and cash flow, its high geographic concentration, the limited track record of Alvogen Pharma US in its current form and the risk that value is transferred to outside of the credit group to fund the emerging markets growth strategy of its parent company, Alvogen Lux Holdings Sarl.

The rating is supported by an adjusted debt-to-EBITDA ratio that is relatively moderate at about 4 times, Moody's said, and with minimal cash taxes and moderate capital expenditures, the agency expects the company to generate positive free cash flow.

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