Moody’s rates Becton Dickinson notes Ba1, Baa2

Moody's Investors Service said it assigned a Ba1 rating to Becton, Dickinson and Co.'s new senior notes due 2020, 2022, 2024, 2027 and 2047, a Baa2 rating to its new senior notes due 2019 and a Ba1 rating to its new $2.25 billion senior term loan. The notes due 2019 are on review for downgrade, and the outlook for the remaining notes is stable.

The Ba1 ratings are being assigned to debt that will partially fund the acquisition of C.R. Bard, Inc. (Baa1/ review for downgrade). The proceeds of the 2019 notes will be used to refinance Becton's existing $1 billion of 2017 notes and are not contingent on the close of the Bard deal.

There is no change to Becton's current ratings. Its existing Baa2 senior and issuer ratings remain under review for downgrade.

Moody's anticipates that it will downgrade Becton's new 2019 notes and its existing senior ratings by two notches to Ba1 with a stable outlook if the transaction closes as currently proposed. Several issues contribute to Moody's view that Becton's ratings will not likely be investment grade, including the magnitude of this deal, so soon after it acquired CareFusion; very high pro forma leverage with debt/EBITDA of over 5.0 times (excluding synergies) and Moody's view that Becton will have limited flexibility to deviate from its deleveraging plan and that deleveraging to investment-grade levels will take longer than the rating agency feels is acceptable.

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