Moody's alters Illumina view to negative

Moody's Investors Service said it revised the outlook of Illumina, Inc. to negative from stable and affirmed Illumina's Baa3 issuer and senior unsecured ratings.

“The revision of the outlook to negative reflects Moody's expectation that Illumina will operate with high financial leverage in the next 12-18 months due to weaker operating performance. Furthermore, Moody's expects free cash flow to be further curtailed in 2023 by a fine likely to be imposed by the European Commission (EC). This fine, which could amount to up to 10% of Illumina's 2022 revenue, is in response to Illumina's decision to press ahead with the acquisition of Grail, Inc. (Grail) in August 2021 prior to receiving approval for the transaction from the EC,” the agency said in a press release.

Moody’s warned it forecasts Illumina’s leverage to remain elevated in 2023 before declining in 2024 to under 3x.

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