Moody's Ratings affirms Baxter's Baa3/P-3 ratings; revises outlook to negative

Moody's Ratings affirms Baxter's Baa3/P-3 ratings; revises outlook to negative

Moody’s Ratings has affirmed Baxter International Inc.’s senior unsecured debt rating at Baa3 and commercial paper rating at P-3 but revised the outlook to negative from stable. The decision follows ongoing operational challenges, including the prolonged voluntary hold on Novum IQ infusion pumps in the US and Canada, which is expected to extend beyond year-end 2025. Additionally, reduced demand for pre-mixed products in Baxter’s Injectables & Anesthesia division and extended hospital conservation of IV solutions through 2026 have slowed debt reduction progress.

Baxter’s net debt/EBITDA ratio remains elevated at 5.2x as of September 30, 2025, despite asset sales and a revised debt reduction target pushed to year-end 2026. While the company has cut shareholder dividends to save $300 million annually, Moody’s noted that gross debt/EBITDA is projected to decline toward 4.0x by 2026. The rating agency highlighted Baxter’s global scale, product diversity, and upcoming product launches as mitigating factors.

Environmental, social, and governance (ESG) considerations, including production issues tied to the Novum IQ pump and governance concerns, also influenced the decision. A future upgrade could occur if debt/EBITDA falls below 3.5x, while persistent ratios above 4.0x may trigger further downgrades. Investors are advised to monitor Baxter’s debt trajectory and operational execution amid the negative outlook.

(https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3519901): S&P Global Regulatory Report.
(https://www.investing.com/news/stock-market-news/moodys-downgrades-baxter-to-baa3-from-baa2-outlook-stable-93CH-4356692): Investing.com, September 2025.