Moody’s gives A3 to Gilead notes

Moody's Investors Service said it assigned an A3 rating to the new senior note issuance of Gilead Sciences, Inc.

There are no changes to the company’s existing A3 senior unsecured ratings or stable outlook.

Proceeds from the offering are for general corporate purposes.

Moody’s said the A3 rating reflects Gilead's market leadership in HIV and hepatitis C pharmaceutical products, its very high profit margins and its strong free cash flow.

The company’s hepatitis C drugs Sovaldi and Harvoni have had the most successful pharmaceutical product launch in history, and despite declining trends, product sales will continue to be strong globally. Truvada and the recently launched Descovy will represent the mainstay of Gilead's presence in HIV, and sales of Gilead's other new HIV products will help HIV revenues continue to rise.

Financial flexibility will remain strong, with debt/EBITDA of 1.2 times pro form for the note offering. Moody's said it anticipates that debt/EBITDA will remain below 2 times absent large acquisitions, and that Gilead will maintain very high levels of cash on hand.

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