New York, October 29, 2014 -- Moody's Investors Service said the ratings of Medtronic, Inc., while remaining under review for downgrade, are likely to fall to A3/Prime-2. This follows Medtronic's announcement earlier this month that it plans to alter the financing of its $42.9 billion acquisition of Covidien plc following the US Treasury's newly issued rules regarding tax inversion transactions. While the purchase price and use of equity will remain the same, Medtronic will be limited in its ability to tap into its overseas cash via an intercompany loan without adverse tax consequences. As a result, Medtronic now plans to borrow about $16 billion in external debt to fund the acquisition, which includes approximately $2.8 billion of new debt originally contemplated.

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