Moody's Investors Service placed Hospira, Inc.'s (NYSE: HSP) ratings, including its Ba1 Corporate Family Rating, on review for upgrade. The action follows the announcement that Pfizer Inc. (A1 stable) plans to acquire Hospira for $16 billion in cash plus the assumption of net debt.

Ratings placed on review for upgrade:

Hospira, Inc.

Corporate Family Rating at Ba1

Probability of Default at Ba1-PD

Senior unsecured notes at Ba1 (LGD 4)

Senior unsecured shelf at (P)Ba1

Moody's rating review of Hospira will consider: (1) the benefits of being part of a larger and more diversified entity; (2) where Hospira's debt is ultimately held within Pfizer's capital structure; and (3) what, if any, support mechanisms, including guarantees, are provided to Hospira's bondholders.

Should Pfizer decide not to guarantee Hospira's debt, or not to provide separate financial statements for Hospira which would enable an independent credit evaluation post-acquisition, Moody's will likely withdraw all ratings on Hospira. For more information, please refer to Moody's rating withdrawal policy on moodys.com.

RATINGS RATIONALE

Hospira's current Ba1 Corporate Family Rating reflects its solid presence in the specialty injectable pharmaceutical market and good growth prospects associated with biosimilars. It also reflects the company's moderate revenues, and conservative financial leverage (excluding one-time expenses). The rating also incorporates the uncertainty surrounding generic competition for its key branded product, Precedex, as well as its history of FDA compliance issues at several manufacturing facilities.

The principal methodology used in these ratings was Global Medical Product and Device Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.