Moody’s lifts Allegiance view to positive

Moody’s Investors Service said it changed the outlook for Allegiance Corp. to positive from stable.

The agency also said it affirmed the company’s existing Baa2 senior unsecured rating.

Allegiance is a subsidiary of Cardinal Health, its debt is fully guaranteed by Cardinal and Cardinal represents the primary credit support for Allegiance’s senior unsecured notes, Moody’s said.

The positive outlook on Allegiance’s credit rating mirrors the positive outlook on Cardinal Health’s ratings, the agency said.

Cardinal is expected to sustain moderate leverage as it pursues acquisitions and shareholder initiatives, Moody’s said.

The outlook also reflects a belief that Cardinal’s operating profit levels will improve as it benefits from recent acquisitions, the agency said.

This offsets customer re-pricing constraints and a slowdown in generic price inflation, Moody’s said.

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