Moody’s could lift CareFusion

Moody's Investors Service said it placed CareFusion Corp.’s Baa3 senior unsecured rating under review for upgrade.

The action follows Moody's public statement that Becton, Dickinson and Co.’s senior unsecured rating is likely to fall to Baa2. This is a revision of Moody's prior view that Becton's ratings would likely fall to Baa3.

This revised view is based on changes Becton made to its financing plan to acquire CareFusion.

Becton announced that it plans to finance its acquisition of CareFusion Corporation with about $1.4 billion less debt (about $7.7 billion instead of about $9.1 billion) than it originally planned. Becton will instead use more excess cash, totaling $2.8 billion, with its equity contribution remaining unchanged at $1.9 billion.

Moody's anticipates that CareFusion's existing debt obligations will remain outstanding post transaction. If the transaction closes as currently proposed, the agency anticipates that it will downgrade Becton's senior unsecured rating by two notches to Baa2, which is one notch above CareFusion's current Baa3 rating.

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