Moody's lowers Walgreen

Moody's Investors Service said it downgraded Walgreen Co.'s senior unsecured debt rating to A2 and confirmed its commercial paper rating at Prime-1.

The downgrade reflects Moody's opinion that the company's attempted unsolicited acquisition of longs Drug Stores reflects a clearly more aggressive financial policy and that the likelihood of Walgreen's making debt financed acquisitions has increased.

The downgrade also reflects greater uncertainty surrounding the company's future strategic direction and financial policies given the sudden retirement of its chairman and CEO on Oct. 10, the agency added, stating that Walgreens' A2 senior unsecured rating primarily reflects the company's very stable operating performance and its strong market position in the retail pharmacy industry, a segment that is expected to be more resilient to the current domestic economic pressures.

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