Moody’s turns Amgen outlook to negative

Moody’s Investors Service said it completed its review for downgrade of Amgen Inc., confirmed the Baa1 senior unsecured ratings and revised the outlook to negative from ratings under review. The agency started the review on Dec. 12.

“The confirmation of the Baa1 rating and the outlook change to negative incorporate both the benefits and risks of Amgen's pending acquisition of Horizon Therapeutics plc (Horizon) for approximately $27.8 billion plus Horizon's net debt. The acquisition is subject to Horizon's shareholders' approval as well as ongoing regulatory reviews and is expected to close within the first half of 2023. Moody's anticipates incremental debt issuance of approximately $27 billion including $4 billion of prepayable term loans and a bond offering that will include short-dated maturities to facilitate deleveraging,” the agency said in a press release.

Moody’s noted Amgen plans to repay $10 billion in debt by the end of calendar year 2025. “Strong free cash flow supports these objectives, which would result in gross debt/EBITDA declining from about 4.8x at the close of the acquisition (on Moody's basis) to below 3.5x by year-end 2025.”

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