Fitch up Guidant watch to positive

Fitch Ratings said it revised Guidant Corp.'s Rating Watch status to positive from evolving following the announcement that Guidant and Johnson & Johnson (AAA) have agreed to a revised merger agreement under which Guidant will be acquired by Johnson & Johnson for $21.5 billion in cash and stock.

Guidant's current ratings are A- senior unsecured debt, A- issuer default rating, A- bank credit facility and F2 commercial paper.

Johnson & Johnson's ratings are AAA senior unsecured debt, AAA issuer default, AAA bank credit facility and F1+ commercial paper.

Guidant's Rating Watch positive status reflects the positive credit implications for Guidant from being acquired by Johnson & Johnson, the agency said.

At Sept 30, Guidant had $2.7 billion in cash, only $355 million in debt and an undrawn $800 million credit facility, Fitch said.

Fitch described Johnson & Johnson's debt as modest, with approximately $2.4 billion outstanding at Sept. 30.

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