Moody's ups Warner Chilcott, rates loan Ba3

Moody's Investors Service said it upgraded Warner Chilcott Co., LLC's probability of default rating to B1 from B2, along with Warner Chilcott Corp., Warner Chilcott Co., LLC and WC Luxco Sàrl's senior secured term loan A due 2014, senior secured term loan B due 2015 and senior secured revolving credit facility due 2014 to Ba3 (LGD 3, 41%) from B1 (LGD 3, 33%).

Ratings revised include Warner Chilcott Corp., Warner Chilcott Co., LLC and WC Luxco Sàrl's senior secured term loan A-1 of $480 million due 2014 and senior secured term loan B-3 of $770 million due 2016 to Ba3 (LGD 3, 41%) from provisional Ba3 (LGD 3, 41%) and Warner Chilcott Corp.'s $750 million senior unsecured notes to B3 (LGD 6, 92%) from provisional B3 (LGD 6, 92%).

The agency also assigned a Ba3 (LGD 3, 41%) rating to the term loan B4 of $250 million due 2016 issued by Warner Chilcott Corp., Warner Chilcott Co., LLC and WC Luxco Sàrl.

The ratings reflect that the company's pro forma debt-to-EBITDA ratio remains within the expectations for Warner Chilcott's ratings, Moody's said.

The ratings also reflect good free cash flow and the company's prior history of deleveraging, the agency said.

Risk factors include its high product concentration risk, declining Actonel sales, an unresolved patent challenge on Asacol and the company's appetite for leverage, Moody's said.

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