Moody's ups King Pharma loans to Ba2

Moody's Investors Service said it affirmed King Pharmaceuticals' Ba3 corporate family rating and stable outlook, and upgraded King's amended and restated $475 million senior secured first-lien revolving credit facility to to Ba2 (LGD2, 28%) from Ba3 (LGD4, 52%).

King's new $200 million senior secured first-lien term loan is currently not rated.

Proceeds from the credit facilities along with existing cash on hand were used to acquire Alpharma, Inc. for $1.6 billion on Dec. 30, 2008.

Moody's lowered the speculative grade liquidity rating to SGL-2 from SGL-1.

The outlook remains stable.

The affirmation reflects sound strategic rationale for the transaction, which expands King's scale and diversity and its expertise in the pain market, and assumption that King will comfortably maintain key credit ratios, according to the agency.

The upgrade reflects the amended collateral package, now consisting of an all-asset pledge including hard assets and intellectual property, Moody's noted.

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