Becton Dickinson Bond Offering Prompts Moody’s to Pare Outlook

Becton Dickinson & Co. plans to sell bonds and use the proceeds to help buy back $1.5 billion of its stock, leading Moody’s Investors Service to cut its outlook to “negative.”

The world’s largest maker of syringes plans to finance most of the cost of its share repurchases with money raised in debt markets, David Elkins, its chief financial officer, said yesterday in a conference call with analysts. Franklin Lakes, New Jersey-based Becton Dickinson plans to issue five- and 10- year debt, according to a filing today with the Securities and Exchange Commission.

Becton Dickinson’s credit metrics may reach “levels that are no longer appropriate” for its A2 rating if proceeds are used exclusively for share repurchases, Moody’s said in a statement. Standard & Poor’s cut its grade on the company yesterday by one step to A+ after it announced the plan to buy back stock and said profit in its next fiscal year may fall below analysts’ estimates.

Earnings from continuing operations in 2012 may reach $5.75 to $5.85 a share, compared with $5.59 in the 12 months ended Sept. 30 and the $6.21 mean forecast of 19 analysts surveyed by Bloomberg.

Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. are managing the offering, Becton Dickson said in the SEC filing.

To contact the reporter on this story: Tim Catts in New York at tcatts1@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net