Moody's moves GlaxoSmithKline view to stable

Moody's Investors Service said it changed GlaxoSmithKline plc's outlook to stable from negative and affirmed its ratings and its financing subsidiaries' A2 long-term senior unsecured ratings

"Today's outlook change follows announcements made by the company at its recent investor event, confirming our assumptions of around £8 billion expected proceeds from the de-merger of the consumer healthcare unit in mid-2022 and a material dividend cut from next year. In addition, the outlook change reflects GSK's intention to retain part of its stake in the consumer healthcare business, which would bring additional proceeds that would be used to reduce gross debt and fund the pension deficit, thereby supporting deleveraging down to at least 3x on a Moody's adjusted basis in the next 18 to 24 months" says Frederic Duranson, a Moody's vice president, senior analyst and lead analyst for GSK, in a press release.

"However, the de-merger itself (excluding the monetization of any stake that is retained) will be broadly neutral for Moody's-adjusted gross debt/EBITDA," added Duranson.

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