Teva Pharmaceutical Industries Ltd.  (TEVA) is ramping up its asset sales in an effort to preserve its credit rating and cut its debt, Bloomberg reported.

Teva is said to be considering a disposal of its Icelandic unit Medis, valued between $500 million and $1 billion. Also on the table is Teva's respiratory treatments unit worth between $500 million and $2 billion. Teva hasn't made any concrete decisions and considerations are still in the early stages, insiders say.

Moody's Corp (MCO) rates Israel-based generic drugmaker Teva "Baa3" with a negative outlook one step above junk. S&P Global (SPI) rates Teva the equivalent of one level higher at "BBB." Fitch Ratings puts Teva at "BBB-."

Teva stock has borne the brunt of generic drug pricing pressure, falling over 40% since it reported disappointing second quarter earnings August 3. Teva stock traded down 2.21% to $17.89 Wednesday midday.

Moody's wrote that Teva, which has about $35 billion in debt, is deleveraging slower than it had expected as generics pricing pressure and the upcoming threat of generic competition for its Copaxone 40mg drug weigh heavily.

"Pricing pressure and delays in new product launches will continue to be headwinds in its U.S. generics business through 2018," Moody's assistant VP Morris Borenstein wrote. Moody's kept Teva as investment grade because it remains the largest generic drug company in the world and still has strong cash flow. 

Moody's said it expects generic competition for multiple sclerosis treatment Copaxone in 2018, but no FDA approval has happened yet. If competition does spring up, it could hinder Teva's cash flow and earnings. 

Moody's added that it could downgrade Teva - which would dip it into junk - if the company has weak cash flow or a debt-to-Ebitda ratio above 4 times for any sustained amount of time, or if generics pricing pressure prohibits growth beyond 2018. 

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