Moody's confirms Schering-Plough

Moody's Investors Service said it confirmed the long-term ratings of Schering-Plough Corp., including the Baa1 senior unsecured debt rating.

The agency said that this rating action concludes a rating review for possible downgrade initiated on March 12, when Schering-Plough announced plans to acquire Organon BioSciences NV for €11 billion.

Moody's said it also affirmed Schering-Plough's Prime-2 commercial paper rating, which was not under review for possible downgrade.

Following these rating actions, the outlook is stable, the agency said.

The rating confirmation reflects Moody's review of the benefits, risks and financing plans associated with the Organon transaction. Key positive attributes include: (1) improved scale and diversity and (2) promising additions to the late stage pharmaceutical pipeline.

The agency said that these factors are offset by: (1) a substantial increase in financial leverage and (2) significant integration and execution risks.

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