Moody's assigns Schering-Plough convertibles Baa3

Moody's Investors Service said it assigned a Baa3 rating to the new $2.5 billion convertible preferred stock offering of Schering-Plough Corp.

Concurrently, Moody's said it placed the new ratings assigned to Schering-Plough under review for possible downgrade, related to Schering-Plough's pending acquisition of Organon BioSciences NV for €11 billion.

Schering-Plough's Prime-2 short-term debt ratings, affirmed on March 12, are unaffected by these rating actions, the agency said.

Moody's noted that its review is focusing on: (1) the quality of Organon's product portfolio, its pipeline and patent exposures, its litigation risk profile and its cash flow potential, (2) more specific financing plans and the resulting effect on Schering-Plough's capital structure and (3) Schering-Plough's deleveraging plans and its acquisition strategy post-Organon.

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