Bergen Debt Ratings Downgraded
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Moody’s Investors Service Inc. said Thursday it downgraded the debt ratings of Bergen Brunswig Corp., primarily as a result of “capital constraints” related to two acquisitions and rapid growth in the Orange company’s core drug distribution business.
About $2 billion of debt and bank borrowings are affected.
Moody’s said it cut the ratings on Bergen’s long-term debt to Ba1 from Baa2 and reduced ratings on short-term debt to Not-Prime from Prime-2.
Bergen said previously that its recently acquired Stadtlander and PharMerica units had experienced revenue shortfalls.
Moody’s noted that the company has moved to reduce inventory, “which should begin to restore operating cash flow.”
The stock closed unchanged at $8 a share on the New York Stock Exchange.
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