Moody’s gives PharMerica facilities B1, Caa1

Moody's Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to PharMerica Corp.

The agency also assigned B1 (LGD 3) ratings to PharMerica's senior secured first-lien revolving credit facility and term loan, and a Caa1 (LGD 5) rating to its senior secured second-lien term loan.

The outlook is stable.

Proceeds will be used to partially fund private equity firm KKR and Walgreens Boots Alliance, Inc.'s (Baa2 stable) acquisition of PharMerica. Upon completion of the transaction KKR will hold a majority equity ownership position and WBA will hold a minority position.

Moody's said it estimates that, excluding synergies, PharMerica's pro forma adjusted debt to EBITDA to be roughly 7.1 times as of June 30.

"We expect PharMerica to achieve drug procurement synergies that will enable the company to deleverage toward 5.0 times by 2018's end," Moody's vice president, senior analyst Jonathan Kanarek said in a news release.

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