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Moody's Downgrades Thermo Fisher on Plan to Buy One Lambda

NEW YORK (GenomeWeb News) – Following Thermo Fisher Scientific's announcement today that it is buying One Lambda for $925 million, ratings agency Moody's Investors Service downgraded the company's senior unsecured rating and all rated senior unsecured notes.

Thermo Fisher's unsecured senior rating and notes were downgraded one notch to Baa1 from A3. Moody's affirmed the Prime-2 rating on Thermo Fisher's commercial paper program and said that the rating outlook is stable.

In addition to the One Lambda purchase, Thermo Fisher today announced it is increasing its share repurchase authorization for the rest of 2012 by $500 million. Moody's said that as a result of the two announcements, it expects Thermo Fisher to raise an incremental $1.3 billion of debt.

Moody's also noted the company's recent purchases of Dionex and Phadia and the repurchase of about $1 billion of its shares, as well as a new quarterly cash dividend program to shareholders of about $200 million per year.

"While Thermo Fisher continues to have the size, market position and diversity of an A-rated company, the company has consistently demonstrated financial policies that favor shareholders at the expense of creditors" Jessica Gladstone, vice president and senior analyst at Moody's, said in a statement. "As a result, we believe that Thermo Fisher's leverage and credit metrics — while still solid — no longer support a single-A rating."

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