(Adds action by Fitch Ratings and Moody's Investors Service)
NEW YORK Jan 26 Fitch Ratings cut its ratings
on Pfizer Inc (PFE.N) on Monday and Standard & Poor's and
Moody's Investors Service said they may cut them after the No.
1 drugmaker announced plans to buy Wyeth for $68 billion.
Pfizer said it secured $22.5 billion in funding from a
consortium of banks to help pay for the deal. For details, see
S&P said it may lower Pfizer to the "AA" category, the
third-highest investment grade, from the top "AAA" if the deal
is completed as planned.
Pfizer is one of only six companies the rating agency
currently rates "AAA."
Moody's also said it may cut the company to "A1," the
fifth- highest investment grade, from "Aa1," the second-highest
"The rating review is focusing on Pfizer's tolerance for
significantly higher debt levels than those contemplated in the
current Aa1 rating," Moody's said in a statement.
Fitch Ratings cut Pfizer one notch to "AA," the
third-highest investment grade, and said it may cut them
"The incremental debt will immediately pressure Pfizer's
credit profile upon the consummation of the transaction," Fitch
The acquisition -- the third-largest in the drug industry
since 1998 -- would help Pfizer cope with a major gap in
revenue in 2011, when its blockbuster Lipitor cholesterol
treatment will begin to face U.S. generic competition.
However, the deal "would only modestly reduce the
proportion of revenues exposed to generic competition through
2011," S&P said. "In our view, Pfizer may need to take other
actions to mitigate the expected revenue and earnings losses."
(Reporting by Karen Brettell and Walden Siew; Editing by Dan