Moody’s assigns A1 to Merck notes

Moody's Investors Service said it assigned an A1 rating to the new senior unsecured euro note offering of Merck & Co., Inc.

There are no changes to Merck's existing ratings, including the A1 senior unsecured rating and the Prime-1 commercial paper rating.

The outlook is stable.

Proceeds from the offering are expected to be used for general corporate purposes, including repayment of commercial paper and other upcoming debt maturities.

Moody’s said the A1 rating reflects Merck's strong competitive position in the global pharmaceutical industry, its very good diversity, its high profitability and its strong cash flow.

The company’s pipeline is impressive with solid breadth and diversity and several recent approvals – highlighting its R&D competency. Notably, the agency said Keytruda will be a significant growth driver in the immuno-oncology category especially following its recent approval in first-line lung cancer.

Moody's said it expects that Merck's financial policies will remain conservative, with gross debt/EBITDA of about 2 times and high levels of cash and investments, most recently reported at $24 billion.

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