Moody's Cuts Valeant Ratings Deeper Into Junk Territory

Moody's Investors Service said Thursday it has downgraded ratings assigned to Valeant Pharmaceuticals International Inc. , sending them deeper into speculative-grade, or "junk" status. Moody's cut the company's corporate family rating to B2 from B1, and its probability of default rating to Caa1-PD from B1-PD. The senior secured rating remains on review for a possible downgrade. The action "reflects a combination of operating headwinds, CEO and board changes occurring at a time of elevated financial leverage, and regulatory scrutiny," Michael Levesque, Moody's senior vice president said in a statement. "Considering the operating risks associated with a difficult pricing and reimbursement environment, Valeant's credit ratios -- including debt/EBITDA in place the company more appropriately at the B2 rating level." Valeant shares were down 2.3% in late trade, and are down 74% in the year so far, while the S&P 500 has gained 1%.