Moody's may downgrade Hospira

Moody's Investors Service said it placed the Baa3 senior unsecured debt ratings of Hospira, Inc. under review for possible downgrade following the announcement that the company has signed an agreement to acquire Mayne Pharma Ltd., a specialty pharmaceutical company based in Australia, for $2 billion in cash.

While this transaction will help to position Hospira as a global player in the generic injectible pharmaceutical arena, financial leverage increases significantly, Moody's said.

The agency's review will consider Hospira's post-close capital structure and liquidity, including terms and conditions associated with new debt instruments; de-leveraging plans and cash flow capabilities; the status of financial and operational controls; the resulting legal organizational structure; integration issues including those associated with an international organization; geographic and product diversity benefits; and synergies associated with this transaction.

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