Fitch cuts Merck, ups Schering-Plough

Fitch Ratings said it downgraded Merck & Co., Inc.'s issuer default rating to A+ from AA- and Schering-Plough Corp.'s issuer default rating to A+ from BBB+.

The agency downgraded Merck's senior unsecured debt and bank loan ratings to A+ from AA- and its short-term issuer default and commercial paper ratings to F1 from F1+, and upgraded Schering-Plough's senior unsecured debt and bank loan ratings to A+ from BBB+ and upgraded the trust preferred stock A- from BBB-.

The outlook is stable.

Fitch said the actions reflect the merger of Merck and Schering-Plough Tuesday for about $41.1 billion.

Pro forma total debt leverage rose to 1.4 times at the end of the third quarter and the actual leverage is expected to fall to 1.3x by the end of 2011, the agency said

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