Moody's rates Amgen convertibles A2

Moody's Investors Service said it assigned A2 ratings to Amgen Inc.'s new convertible senior unsecured notes due in 2011 and 2013 and affirmed its existing ratings , including its A2 senior unsecured debt rating and its Prime-1 short-term debt rating for commercial paper.

The outlook remains stable, although Moody's said that flexibility within the current rating category has been greatly diminished.

The rating affirmation reflects Moody's belief that despite the very large increase in gross debt levels, Amgen appears likely to sustain financial ratios and other operating metrics consistent with the A rating category.

The agency said Amgen's credit strengths continue to include healthy demand for products, the low likelihood of imminent biogenerics and strong free cash flow.

These are offset by more aggressive financial policies favoring higher share repurchases and greater financial leverage, high product concentration risk and the potential for less robust growth in core products amidst a number of changing reimbursement dynamics and increasing competition, the agency said.

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