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Teva’s Credit Rating Cut to Junk by Fitch

  • Fitch downgrades drugmaker’s debt two levels to BB from BBB-
  • Shares of Teva extend this year’s rout to 70 percent
An employee works with sterile products during the manufacture of pharmaceuticals inside Teva Pharmaceutical Industries Ltd.'s in Godollo, Hungary.

Photographer: Akos Stiller/Bloomberg

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Teva Pharmaceutical Industries Ltd. Chief Executive Officer Kare Schultz is finding himself in the hot seat in his first week on the job with rapidly shrinking options to halt the slide in the Israeli company’s securities after its debt was cut to junk overnight.

Fitch Ratings cited the “significant operational stress” that the world’s biggest maker of copycat drugs faces at a time when it needs to pay down debt, and pared its rating by two levels to non-investment grade late on Monday. Teva’s debt obligations are almost three times its market value following an ill-timed $40 billion acquisition last year of Allergan Plc’s generics business.