Moody's may upgrade Barr, affirms Teva

Moody's Investors Service said it placed Barr Laboratories, Inc.'s Ba1 (LGD4, 50%) senior unsecured term loan due 2011 and revolving credit facility due 2011 under review for possible upgrade and affirmed Teva Pharmaceutical Industries Ltd.'s Baa2 senior unsecured issuer rating.

The agency also affirmed Teva Pharmaceutical Finance Co., LLC's $500 million senior notes due 2016, $500 million senior notes due 2026 and convertible senior debentures due 2036 at Baa2 and Teva Pharmaceutical Finance Co. BV's convertible senior debentures due 2026 at Baa2.

Teva's outlook remains stable.

These rating actions follow Teva's announcement that it will acquire Barr for about $7.46 billion plus $1.5 billion of net debt.

rating review of Barr's credit facilities will focus on the treatment of Barr's debt within Teva's corporate structure and the presence of any support mechanisms, the agency said.

The affirmation of Teva's Baa2 rating reflects a cushion within the rating based on good CFO-to-debt and FCF-to-debt metrics and cash and investments totaling over $3 billion; the use of equity to fund 40% of the acquisition; and the sound strategic rationale for the transaction, Moody's said.

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