Ratings placed on review for downgrade:

Baxter International, Inc. A3 senior unsecured notes (P)A3 senior shelf rating Ratings affirmed: Baxter International, Inc. Prime-2 short-term rating Baxter Holding BV: Prime-2 short-term rating Gambro's hemodialysis portfolio will augment Baxter's peritoneal dialysis offerings, and provide an opportunity for cost synergies. However, the size of the transaction and the company's plan that this will be funded with $3 billion of additional debt create concern that credit metrics will remain outside of those consistent with an A3 rating for a protracted period of time. Furthermore, we believe a significant portion of Gambro's sales are derived from Europe, which is currently undergoing greater contraction due to austerity measures.

"Baxter's planned acquisition of Gambro is outside of our expectations, both from a size and funding perspective," said Diana Lee, a Moody's Senior Credit Officer. In addition, this transaction follows Baxter's decision earlier this year to substantially increase its dividend as well as its capital expenditures, which will already stress free and retained cash flow.

The rating review will consider: (1) strategic benefits and potential challenges associated with Gambro; (2) global trends for dialysis utilization and reimbursement; (3) cash flow expectations and deleveraging plans; (4) expected cost synergies; (5) Baxter's US cash needs and US cash inflows; and (6) the potential for additional acquisition activity.

The principal methodology used in rating Baxter International, Inc. was the Global Medical Product and Device Industry Methodology published in October 2012. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Baxter International Inc, headquartered in Deerfield, Illinois, manufactures products assisting patients with complex medical conditions including cancer, hemophilia and kidney disease.

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Diana Lee VP - Senior Credit Officer Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Peter H. Abdill, CFA MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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