Moody’s assigns Ba2 rating to $960M in Fresenius notes

Boston Business Journal by Julie M. Donnelly , juliedonnelly@bizjournals.com

Date: Wednesday, September 14, 2011, 3:38pm EDT

Moody’s Investors Service has assigned a definite Ba2 rating to about $960 million in bonds issued by finance companies wholly owned by Fresenius Medical Care AG    & Co. KGaA (NYSE: FMS), a Germany-based global provider of dialysis services.

The company’s North American operations are headquartered in Waltham, Mass.

Moody’s said the rating reflects the company’s strong market position and recurring nature of its revenues. The ratings outlook is stable.

But Moody’s said risks include the company’s relatively high adjusted financial leverage, which is due in part to multiple recent acquisitions. Moody’s also noted that the company has high exposure to tightening healthcare budgets and regulation changes associated with the federal health care overhaul, and with cuts to Medicare.

Moody’s said its stable outlook reflects the agency’s expectation that cuts to government reimbursements for care in the U.S. will be limited, and its projection that the pace of acquisitions will slow over next 12 months to 18 months.

Fresenius booked worldwide revenues of $12 billion in 2010.