Moody's placed the Baa3 senior unsecured ratings of Teva Pharmaceutical Industries Ltd. under review for a downgrade.
The rating agency said Teva's existing financial leverage exceeded levels acceptable for its existing rating and warned of a higher than previously anticipated decline in the company's earnings from its multiple sclerosis drug Copaxone.
The report added that weakness in the U.S. generics business will also weigh on Teva for at least the next two years.
However, Teva's restructuring plan, which aims to achieve $3 billion in cost savings, is credit positive. Moody's review will focus on the timing and execution risk of achieving the cost-savings and the potential negative effects of the drastic cost cuts in areas such as research and development and quality control.
In addition, the review will also focus on the impact of the restructuring on cash flows and leverage through 2019.
