Teva Pharmaceutical Credit Rating Cut to Negative at Moody’s

Teva Pharmaceutical Industries (TEVA), an Israeli maker of generic drugs, had its credit-rating outlook cut to negative from stable by Moody’s Investors Service amid concerns about refinancing needs over its exposure to opioid-relation lawsuits.

The rating was affirmed at Ba2, the second-highest non-investment grade level, Moody’s said in a note on Wednesday. Maturing debt over the next few years is expected to eat up a “significant portion” of Teva’s cash flow over the next 18 months, it said.

“The negative outlook reflects Moody’s concern over Teva’s persistently high leverage and large refinancing needs in light of its rising exposure to opioid-related litigation,” the agency said in a note.

Teva’s stock was sinking 10% in late trading.

Drugmakers are facing lawsuits from several US state and local governments over the growing epidemic of the powerful opioid painkillers. The Centers for Disease Control and Prevention said that almost 68% of the more than 70,000 drug overdose deaths in 2017 involved a prescription or illicit opioid.

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