Moody's rates Zimmer notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to Zimmer Holdings, Inc.'s new senior unsecured note offering.

The outlook is stable.

Proceeds from the transaction are expected to be used to refinance existing bank borrowings and for general corporate purposes, including share buybacks.

Zimmer's Baa1 rating considers the company's position as one of the leading players in orthopedics, with high reliance on reconstructive knee and hip products, the agency said.

Zimmer's limited diversity is offset by relatively strong credit and leverage ratios even after incremental debt associated with this offering, the agency noted.

The ratings reflect expectation that going forward, share buyback activity and moderate-sized acquisitions will be funded with free cash flow, according to Moody's.

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