Moody's affirms Eli Lilly

Moody's Investors Service said it affirmed Eli Lilly & Co.'s A2 senior notes, debentures and issuer rating following the announcement that Lilly will acquire the animal health business of Novartis AG for about $5.4 billion. The outlook remains stable.

"The affirmation of Lilly's ratings reflects the scale and diversification benefits of Novartis Animal Health and the use of off-shore cash to fund the majority of the purchase price. The debt portion of the purchase price will result in a deterioration of Lilly's credit ratios, but to levels that still remain within Moody's expectations for the A2 rating," Michael Levesque, a Moody's senior vice president, said in an agency news release.

The agency said Lilly's A2 rating reflects its good scale and solid competitive position as one of the 15 largest global pharmaceutical companies by revenue, its high profitability and its strong cash flow.

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