Fitch: Merck outlook negative

Fitch Ratings said it has affirmed Merck & Co.'s long-term ratings, including the issuer default rating at A+.

The outlook remains negative.

In addition, Fitch said it has affirmed the company's short-term ratings at F1.

According to the agency, the negative outlook mainly reflects that leverage (total debt/EBITDA) has remained above 1.5 times since Merck's $5 billion, largely debt-funded share repurchases in second-quarter of 2013.

While leverage has declined to 1.65x from its peak of 1.92x at June 30, 2013, it remains higher than what Fitch said it would expect for an A+ credit rating for this issuer.

Fitch expects that Merck will continue to favor share repurchases over deleveraging, acknowledging the possibility of further debt-funded stock buybacks.

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