Fitch: Schering-Plough to benefit

Fitch Ratings said it said that Schering-Plough Corp.'s credit standing will ultimately benefit from Merck & Co.'s credit profile despite incremental debt required to complete the purchase.

Fitch said it has placed Schering-Plough's BBB+/F2 long- and short-tem ratings on rating watch positive, noting that the ratings apply to about $8.2 billion of debt and $2.5 billion of mandatory convertible preferred stock.

Separately, Fitch added that it placed Merck's AA-/F1+ long- and short- term issuer default ratings on rating watch negative in response to the merger announcement.

Uncertainty still exists pertaining to Merck's final capital structure upon closure of the transaction; however, once Fitch garners additional information, Schering-Plough's credit ratings will be finalized.

Fitch added that it has placed Schering-Plough on rating watch positive as follows: long-term issuer default rating BBB+; senior unsecured debt BBB+; bank loans BBB+; preferred stock BBB-; short-term issuer default rating F2; and commercial paper F2.

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