Moody’s affirms GlaxoSmithKline

Moody's Investors Service said it affirmed the A2/provisionalA2 long-term and provisional Prime-1 ratings of GlaxoSmithKline plc (GSK) and its guaranteed subsidiaries following its announcement that it will buy Novartis' stake in their consumer-health joint venture for $13 billion.

The outlook is stable.

"Our decision to affirm GSK's ratings is a reflection that proceeds from planned asset sales could be used to reduce leverage and soften the impact on its balance sheet of the debt-financed Novartis buyout. Moreover, GSK's liquidity post-acquisition will remain strong while the purchase will strengthen its position in the consumer-health sector," Moody’s vice president, senior analyst Knut Slatten said in a news release.

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