Moody's changes Guidant to direction uncertain

Moody's Investors Service said it changed the direction of its rating review of Guidant Corp.'s debt to direction uncertain from possible upgrade.

The ratings under review include the Baa1 senior notes, Baa1 unsecured bank facility and Prime-2 short-term rating.

The change is based on comments made by Johnson & Johnson during its third-quarter earnings conference call on Tuesday that lead Moody's to believe that Johnson & Johnson may not complete its merger agreement with Guidant.

Moody's said the change is also based on concerns regarding possible longer-term effects of the recent recalls of Guidant's defibrillator products and uncertainty regarding Guidant's strategy if it remains a stand-alone company.

If the acquisition occurs substantially as planned, Moody's said it could possibly upgrade the ratings.

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