Moody's: Walgreen's negative

Moody's Investor Service said it changed Walgreen Co.'s outlook to negative from stable.

At the same time, Moody's affirmed all of Walgreen's ratings, including its A2 senior unsecured rating and Prime-1 commercial paper rating.

This rating action follows Express Scripts' lawsuit against Walgreen for a campaign to disparage the company as well as a dispute over whether or not Medicare recipients who remain with Express Scripts will be able to fill Part D prescriptions at Walgreen after Dec. 31, the agency noted.

Moody's said the negative outlook reflects the risk that Walgreen's credit metrics, which are already at levels that are weak for its A2 rating, may decline should it not be able to resolve the contract dispute or significantly make up for the lost revenue through participation in other pharmacy network plans.

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