S&P lowers Pfizer, lifts Wyeth

Standard & Poor's said it lowered its corporate credit and senior unsecured ratings on Pfizer Inc. to AA from AAA and the preferred stock rating to A+ from AA+ and removed the ratings from CreditWatch, where they were placed with negative implications on Jan. 26, 2009. The A-1+ rating on Pfizer's commercial paper was not on watch and is affirmed.

Wyeth's senior unsecured debt ratings were raised to AA from A+, and the corporate credit rating was withdrawn. All ratings for Wyeth were removed from CreditWatch, where they were placed with positive implications on Jan. 26, 2009.

The companies completed their merger on Thursday, and the outlook is stable.

The agency said the lowered ratings on Pfizer reflect the challenge to realize earnings and cash flow benefits in light of pending patent expirations in the midst of a currently difficult market as well as the significant additional borrowings needed to fund the acquisition of Wyeth.

The ratings on the acquired Wyeth debt were equalized with those of Pfizer debt because S&P views the combined company as a single economic entity with little incentive or willingness to place the acquired debt at a disadvantage.

The agency said the stable outlook reflects its expectation of a rapid improvement in credit metrics to a level consistent with the AA rating as Pfizer harnesses the combined cash flows to reduce leverage.

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