Moody's assigns Organon, loans Ba2

Moody's Investors Service said it assigned a Ba2 corporate family rating to Organon & Co. Also, Moody's assigned a Ba2-PD probability of default rating, a Ba2 rating to Organon's new senior secured credit facilities and an SGL-2 speculative grade liquidity rating. The outlook is stable.

"Organon's Ba2 rating reflects good margins and favorable diversity, tempered by spin-off execution risk and acquisition event risk," stated Michael Levesque, a Moody's senior vice president, in a press release.

The senior secured credit facilities will consist of a term loan A, a dollar-denominated term loan B, a euro-denominated term loan B and a revolving credit facility.

Proceeds from the term loans, together with proceeds from expected secured and unsecured senior notes offerings, will be used to pay a $9 billion dividend to Merck & Co., Inc. related to Organon's spin-out from Merck, and to provide initial cash on hand, the agency said.

The outlook reflects an expectation for a successful transition to a stand-alone company, stable operating performance due to growth in women's health and biosimilars and debt/EBITDA sustained below 4.5x, Moody’s said.

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