Fitch revises Bayer outlook to negative

Fitch Ratings said it revised Bayer AG's outlook to negative from stable and affirmed its BBB+ long-term issuer default rating and senior unsecured rating.

The agency also revised subsidiary Monsanto Co.'s outlook to negative from stable, and affirmed its long-term IDR at BBB+, in line with the rating of its parent Bayer under Fitch's parent/subsidiary linkage methodology.

“The negative outlook reflects greater operational and business risks in Bayer's core operations –– pharma and crop science –– and event risks associated with multiple pending litigation settlements. We expect crop science to see a decline in revenues after a positive 2022, which coupled with increasing competition and pricing pressures in the pharma business, will result in limited free-cash-flow (FCF) generation and EBITDA net leverage at or close to the rating's negative sensitivity through 2026,” Fitch said in a press release.

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