Moody's affirms King Pharmaceuticals

Moody's Investors Service said it affirmed the ratings of King Pharmaceuticals, Inc., including the Ba3 corporate family rating, Ba2 senior secured revolver due 2007 and Ba3 senior unsecured guaranteed convertible debentures due 2021.

The outlook remains negative.

The affirmation of King's Ba3 corporate family rating reflects good cash flow from operations and free cash flow in 2005, the settlement agreement reached in October to resolve various outstanding governmental investigations including the Department of Justice and the recently proposed settlement of Altace patent litigation with Cobalt Pharmaceuticals, Inc., the agency said.

Despite these positive developments, the outlook remains negative, primarily because of Moody's concerns about the long term sustainability of King's cash flow and the uncertain success of King's long-term growth strategy, Moody's added.

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