Moody's may lower King Pharma

Moody's Investors Service said it placed the debt ratings of King Pharmaceuticals Inc. under review for possible downgrade.

Ratings affected include the company's $400 million senior secured revolving credit facility due 2007 at Baa3, $345 million senior unsecured guaranteed convertible debentures due 2021 at Ba1, senior implied rating of Ba1, and senior unsecured issuer rating of Ba2.

Moody's said this rating action follows the company's announcement that it has become aware that net sales of some of its key branded pharmaceutical products have been and may continue to be affected by additional significant wholesale inventory reductions, particularly during the second quarter of 2004.

Management has indicated that it would be imprudent to provide forward-looking revenue and earnings guidance. As a result management withdrew its previously provided guidance for year-end 2004. Management also announced that it believes actual results will be lower than originally estimated.

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