Moody's cuts Abbott Laboratories outlook to negative

Moody's Investors Service said it affirmed Abbott Laboratories' A1 senior unsecured debt rating and Prime-1 short term debt rating following the completion of Abbott's acquisition of Guidant Corp.'s vascular assets as agreed upon with Boston Scientific.

However, the outlook was changed to negative, the agency said.

Affected ratings include Abbott Laboratories' A1 industrial revenue bonds and Abbott Japan Co., Ltd.'s A1 backed senior unsecured notes.

Moody's said key credit strengths reflected in Abbott's ratings include relatively large size, diverse product portfolio and limited concentration risk.

The negative outlook is based on concerns that the additional leverage associated with this transaction will reduce financial flexibility, highlighted by lower operating and free cash flow to debt ratios and significantly reduced cash coverage of debt, the agency added.

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