Moody’s drops Allergan to Baa3

Moody's Investors Service said it downgraded the senior notes of Allergan, Inc. to Baa3 from A3 following Allergan's acquisition by Actavis plc and the subsequent guarantee provided to the bonds by Actavis plc and Warner Chilcott Ltd. on April 17.

Actavis plc is the ultimate parent of Actavis, Inc., Actavis Funding SCS and Forest Laboratories Inc., all of which are rated Baa3.

Moody’s said the downgrade reflects the fact that Allergan is now part of a company with significantly higher financial leverage.

The Baa3 rating on the Allergan bonds reflects Moody's analysis of the credit quality of the consolidated Actavis organization because: (a) Moody's expects Allergan to become highly integrated with Actavis' operations; (b) the combined company will have flexibility to move assets out of Allergan subsidiaries; and (c) stand-alone financials for Allergan will no longer be provided.

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