Moody's cuts Axcan loan

Moody's Investors Service said in a corrected news release that it affirmed Axcan Intermediate Holdings Inc.'s B2 corporate family and probability of default ratings, B1 (LGD3, 39% from LGD3, 38%) $750 million senior secured term loan and $115 million senior secured revolving credit agreement due 2016, Caa1 (LGD6, 90%) senior notes and SGL-2 speculative-grade liquidity rating.

Moody's said it lowered Axcan's $115 million senior secured revolving credit facility due 2014 to B1 (LGD3, 39%) from Ba3 (LGD2, 27%).

The rating outlook is stable.

The affirmation is based on Axcan's recently completed financing arrangements, which include the $750 million term loan and senior secured revolving credit commitments.

Proceeds of the financing are being used to fund the acquisition of Eurand NV, to repay Axcan's existing $228 million of 9¼% senior secured notes due 2015 and to repay Axcan's existing term loan A borrowings.

Axcan's ratings reflect the acquisition of Eurand, which may result in improvements in scale and product diversity as well as high financial leverage and continued delay in FDA approval for Axcan's Ultrase and Viokase PEP products, the agency said.

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