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Moody's might lift Biomet
Moody's Investors Service said it placed Biomet, Inc.'s debt ratings (B2 CFR) under review for upgrade following news that the company signed a definitive agreement to be acquired by Zimmer Holdings, Inc. for $13.35 billion.
At the same time, the agency affirmed Biomet's SGL-2 rating.
Moody's understands that Zimmer intends to repay Biomet's debt. Assuming all of Biomet's existing debt is retired, the ratings will be withdrawn.
Moody's said the review will focus on the benefits of Biomet becoming part of a larger combined company with a stronger credit profile. Although the agency understands that management expects Biomet's debt to be repaid, and there are mandatory redemption provisions in the bond indentures, if any debt remains outstanding, the rating review will evaluate any support mechanisms Zimmer provides to Biomet's debt.
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