Moody's upgraded Baxter International Inc.'s senior unsecured rating to Baa1 from Baa2.

The ratings outlook is stable.

Moody's Senior Vice President Scott Tuhy said the upgrade takes into account the rating agency's expectations that operating initiatives undertaken by the company will allow it to sustain operating margins in the 16% to 17% range over the next 12 to 18 months.

The upgrade also reflects Moody's expectation that Baxter will maintain low leverage with debt/EBITDA near 2x, said Tuhy.

Moody's said the Baa1 rating reflects the company's good scale and leading market positions in a broad range of medical products, including renal care, medication delivery, pharmaceuticals and nutrition products.

Baxter International is a healthcare equipment company with a diverse portfolio of healthcare products.