Moody's lowers Orthofix

Moody's Investors Service said it downgraded Orthofix International NV and its subsidiary Orthofix Holdings Inc.'s corporate family rating to B1 from Ba3, probability-of-default rating to B2 from B1 and senior $45 million senior secured revolver due 2012 and $330 million senior secured term loan due 2013 to B1 (LGD3, 31%) from Ba3 (LGD3, 34%). The actions conclude the review for downgrade that began on Feb. 14.

According to Moody's, the downgrade to B1 reflects lower operating and free cash flow generation than Moody's anticipated at the time of the acquisition of Blackstone in September 2006.

The downgrade also reflects increased litigation risk and appetite for acquisitions, the agency said. The B1 rating also considers the company's competitive position and its ability to execute its strategy of becoming a leader in the spine market, Moody's said.

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