• About Hisa Technologies
  • Advertise
  • Careers
  • Contact Us
  • Estate Cloud
Friday, January 27, 2023
  • Login
  • Register
No Result
View All Result
NEWSLETTER
Kenyan Wallstreet
  • Home
  • News
    • Kenyan News
    • African News
    • Global News
  • Business
    • Agriculture
    • Banking
    • Aviation
    • Energy
    • Manufacturing
    • Markets
    • Technology
    • Startups
  • Money Matters
  • Podcast
  • Videos
  • Digital Assets
  • Calendar
  • Home
  • News
    • Kenyan News
    • African News
    • Global News
  • Business
    • Agriculture
    • Banking
    • Aviation
    • Energy
    • Manufacturing
    • Markets
    • Technology
    • Startups
  • Money Matters
  • Podcast
  • Videos
  • Digital Assets
  • Calendar
No Result
View All Result
Kenyan Wallstreet
No Result
View All Result

Moody’s changes GSK’s outlook to negative; affirms A2 ratings

John NjirubyJohn Njiru
December 6, 2018
in Global News
Reading Time: 2 mins read
GSK

Moody’s Investors Service has today changed to negative from stable the outlook of GlaxoSmithKline plc and its guaranteed subsidiaries. This follows the company’s 3 December 2018 announcement of its intention to acquire Tesaro for $5.1 billion.

GSK said it had reached a definitive agreement to acquire Tesaro, a US based biotech company known for its Poly ADP-ribose polymerase (PARP) inhibitor, for $5.1 billion in cash. The transaction – expected to close in the first quarter of 2019 – more than offsets the approximately $3.05 billion of net proceeds that GSK will receive after it divests from Horlicks and other Consumer Healthcare nutrition products to Unilever plc, and its Consumer Healthcare Limited (GSK India) merger with Hindustan Unilever Limited.

By 30 September 2018, GSK displayed a leverage – defined as Moody’s adjusted debt/ EBITDA – of around 3.6x. Moody’s expectation for GSK’s leverage was to move below 3x by the end of 2019 under the assumption that asset disposals would contribute to a lowering of the company’s outstanding gross debt.

Fj8qeFoXkAEPAzj
ADVERTISEMENT

This changed with GSK’s move to acquire Tesaro. Its future deleveraging will be slower than initially expected, says Moody’s.

Tesaro is currently running with an operating loss and GSK has said it expects the acquisition to be earnings accretive to its earnings per shares from 2022. As a consequence, the acquisition of Tesaro will, in addition to increasing debt, also put pressure on GSK’s EBITDA and cash flows over the next three years and Moody’s believes GSK is likely to operate with a leverage above 3x until at least 2021. This is stretched for the A2 rating level and, at least in the short term, not in line with the company’s prior public commitments toward a strengthening of its credit profile.

“We have changed GSK’s outlook to negative as the company will deleverage more slowly than expected following the acquisition of Tesaro. While the acquisition allows for a solid strengthening of GSK’s oncology franchise, we expect credit metrics to remain weak for a prolonged period of time,” says Knut Slatten, a Vice President – Senior Analyst at Moody’s.

Still, Moody’s has affirmed GSK’s A2/(P)A2 long-term and (P)Prime-1 ratings.

In view of the change of outlook to negative, upward pressure on the ratings is not anticipated in the short term. A stabilisation of the outlook would require credit metrics to strengthen from their current levels so that the (gross) debt/EBITDA ratio would show a glide path to below 3x beyond 2019 with a cash flow from operations (CFO)/debt ratio improving towards the high 20s (as adjusted by Moody’s).

Over time, upward pressure on the A2 rating could develop should CFO/debt improve towards 40 per cent with a Moody’s adjusted debt/EBITDA decreasing below 2.5x on a sustainable basis.

Negative pressure on the rating could arise if GSK’s debt/ EBITDA were to fail to deleverage from current levels leaving its leverage ratio sustainably above 3x with a CFO/debt remaining below the high 20s.


Previous Post

Barclays’ Timiza Hits 2.7 Million users

Next Post

Lake Turkana Wind Power’s extra Ksh9.6B Penalty Demands From Government Put on Spot

Related Posts

IMF

IMF Approves $105 Million Food Shock Window to Haiti

January 24, 2023
Microsoft

Microsoft to Lay Off 10,000 Employees Over Economic Downturn

January 19, 2023

China’s Economic Growth Falls to 3% in 2022 on the Back of COVID-19 Resurgence  

January 17, 2023

Nigeria’s GT Bank Fined in UK Over Money-Laundering Controls

January 12, 2023

Celo Introduces New Brand Identity to Promote Mainstream Adoption of Web3 Technology

January 11, 2023

World Bank Cuts Global Growth Forecast to 1.7% on Rising Inflation Rates

January 11, 2023

BioNTech to Acquire 100% of InstaDeep Shares

January 11, 2023

World Food Prices Hit Highest Level on Record in 2022

January 7, 2023
Load More
Next Post
Lake Turkana Wind Power Project

Lake Turkana Wind Power's extra Ksh9.6B Penalty Demands From Government Put on Spot

Follow Us

  • 162.8k Followers
  • 3.6k Subscribers
  • 1.2k Followers

WhatsApp

Subscribe

Telegram  

Subscribe

Podcasts

Upcoming Events

There are no upcoming events.

View Calendar
Add
  • Add to Timely Calendar
  • Add to Google
  • Add to Outlook
  • Add to Apple Calendar
  • Add to other calendar
  • Export to XML

Featured

No Content Available

About Us

We are a leading integrated digital content platform providing in-depth business and financial news across Sub-Saharan Africa & the globe. Kenyanwallstreet.com is a property of Hisa Technologies Ltd, a financial media & software company.

Contact Us

Kenyan Wall Street
Email: [email protected]
Website: www.kenyanwallstreet.com

Disclaimer

The information contained in this website is for general information purposes only.
Read more..

  • About Hisa Technologies
  • Advertise
  • Careers
  • Contact Us
  • Estate Cloud

Copyright 2021. Hisa Technologies. All Rights Reserved.

No Result
View All Result
  • Home
  • News
    • Kenyan News
    • African News
    • Global News
  • Business
    • Agriculture
    • Aviation
    • Banking
    • Energy
    • Infrastructure
    • Insurance
    • Investment
    • Manufacturing
    • Markets
    • Public Policy
    • Real Estate
    • Startups
    • Technology
  • Podcast
  • Videos
  • Events

Copyright 2021. Hisa Technologies. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In