Fitch lowers GlaxoSmithKline

Fitch Ratings said it downgraded GlaxoSmithKline plc's long-term issuer default rating from A to A-.

The outlook is stable.

Fitch also said it downgraded the senior unsecured rating on the debt issued under GlaxoSmithKline Capital plc and GlaxoSmithKline Capital Inc. to A- from A.

The downgrades reflect an expectation that GSK's leverage will remain high for an A rated pharmaceutical company through 2021, Fitch said.

The agency said it expects free cash flow to be negative to break-even during the next two years as a result of the company's generous dividend policy.

The ratings also factor in GlaxoSmithKline's strong business profile with an improved position in oncology and consumer healthcare, Fitch said.

The group operates a diversified business spanning a broad portfolio of non-cyclical treatment areas with industry leading positions in respiratory diseases, HIV, vaccines and consumer healthcare, the agency said.

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