Moody’s could raise Hospira

Moody's Investors Service said it placed Hospira, Inc.'s ratings, including its Ba1 corporate family rating, Ba1-PD probability of default rating, Ba1 (LGD 4) senior unsecured notes and provisional Ba1 senior unsecured shelf, on review for upgrade.

The action follows the announcement that Pfizer Inc. (A1 stable) plans to acquire Hospira for $16 billion in cash plus the assumption of net debt.

Moody's said the review will consider: (a) The benefits of being part of a larger and more diversified entity; (b) where Hospira's debt is ultimately held within Pfizer's capital structure; and (c) what, if any, support mechanisms, including guarantees, are provided to Hospira's bondholders.

Should Pfizer decide not to guarantee Hospira's debt, or not to provide separate financial statements for Hospira, which would enable an independent credit evaluation post-acquisition, the agency said it will likely withdraw all ratings on Hospira.

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