Moody's cuts Pfizer's rating on Wyeth acquisition

NEW YORK Oct 15 (Reuters) - Moody's Investors Service on Thursday cut its ratings on drugmaker Pfizer Inc (PFE.N) by two notches because of higher leverage resulting from its acquisition of U.S. rival Wyeth.

Pfizer, the world's largest drugmaker, completed its roughly $67 billion acquisition of Wyeth on Thursday after U.S. and Canadian antitrust regulators cleared the deal. For details click on [ID:nN15309026].

Moody's downgraded Pfizer to A1, the fifth-highest investment-grade rating, from Aa2. The rating agency said it is still reviewing Wyeth's A3 long-term rating and a decision will depend on Pfizer's treatment of Wyeth's debt. A3 is the seventh-highest investment grade.

"The Wyeth acquisition provides Pfizer with increased scale and diversity, an improved pharmaceutical pipeline and significant synergy opportunities," Moody's said in a statement. However, key financial measures, including the ratio of debt to earnings before interest, taxes, depreciation and amortization, will initially erode, the rating agency said.

Liquidity will remain strong, with cash and short-term investments expected to be greater than $30 billion, supplemented by $7 billion in undrawn revolving credit agreements and strong free cash flow, Moody's said.

(Reporting by Dena Aubin; Editing by Andrew Hay)