Moody's rates Reliant loans B2

Moody's Investors Service said it assigned B2 corporate family and probability-of-default ratings to Reliant Pharmaceuticals, Inc. and B2 ratings with loss-given-default assessments of LGD3 (48%) to the company's $170 million first-lien senior secured term loan due 2012 and $45 million first-lien senior secured delayed-draw term loan due 2012.

The outlook is positive.

The proceeds from the loans are expected to be used to repay existing debt and for general purposes.

The agency said Reliant's B2 corporate family fating reflects the company's significant product concentration risk, primarily in Omacor; weak cash flow relative to debt; limited history as a profitable company and below-average size and scale.

The company scores favorably on Moody's pharmaceutical rating methodology in the areas of patent exposure and cash coverage of debt, the agency noted.

The positive outlook considers the possibility that very strong prescription trends for Omacor could result in a significant expansion of cash flow in the next 12 to 18 months.

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