Moody's to review Schering-Plough ratings for downgrade

27 August 2003 15:18  [Source: ICIS news]

HOUSTON (CNI)--Commercial credit ratings agency Moody's placed the debt of Schering-Plough (S-P) under review for a possible ratings downgrade Wednesday citing concerns about the pharmaceutical giant's cash position.

The New York City-based commercial credit ratings agency said it was worried that Schering-Plough's operating cash flow "may fall significantly below" Moody's earlier expectations because of falling sales and declining market share.

Moody's said its ratings review will focus on the performance of key S-P product franchises against increasing generic competition, steps management is taking to stabilise financial performance and the impact of potentially lower free cash flow on Schering-Plough's balance sheet.

Moody's said it expects that the S-P rating change could be one or two notches downward and was placing both long- and short-term debt ratings under review.

Moody's said S-P's liquidity remains "very good" adding that "this liquidity should provide flexibility to withstand weaker operating cash flow, potentially negative free cash flow and potential outflows associated with litigation."

Headquartered in Kenilworth, New Jersey, Schering-Plough had 2002 sales of $10.2bn (Euro9.4bn).

By: Mike Sheridan
+1 713 525 2653

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