Moody's Downgraded Rating On Roche Following Genentech Buyout
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Moody's downgraded the long-term rating of Roche Holding AG to A2 from Aa1 following the company's successful tender offer for the remaining shares of Genentech, Inc. (NYSE: DNA). The outlook is stable.
Marie Fischer-Sabatie, a Vice President-Senior Analyst in Moody's Corporate Finance Group, said, "Moody's understands the strategic rationale behind the transaction, as Roche will obtain full access and control over Genentech's cash flows upon completion... However, the several positives gained from the transaction do not make up for the substantial weakening in Roche's credit metrics, as leverage will increase significantly."
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