Moody's rates King Pharma loans Ba2

Moody's Investors Service said it assigned a Ba2 rating (LGD3, 33%) to the proposed $1 billion senior secured credit facilities of King Pharmaceuticals, Inc. and affirmed its Ba3 corporate family and probability-of-default ratings.

The outlook remains stable.

"The affirmation of King's Ba3 ratings reflects sound strategic rationale for acquiring Alpharma and good cushion in King's credit metrics even following the recent launch of Altace generics," Michael Levesque, Moody's senior vice president, said in a written statement.

The Ba2 rating is based on its senior position in King's capital structure, and Moody's understanding that collateral will consist of an all-asset pledge including hard assets and intellectual property, the agency said.

The Ba2 rating on the secured credit facilities also reflects loss absorption provided by King's $400 million senior unsecured convertible notes due 2026, the agency noted.

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