Fitch affirms Schering-Plough

Fitch Ratings said it affirmed Schering-Plough Corp.'s A- senior unsecured debt and bank loan ratings, the BBB+ preferred stock rating and the F2 commercial paper rating.

The outlook is negative.

Schering-Plough has experienced two consecutive quarters of sales growth and EBITDA margin expansion indicating that management's goals for the stabilization of sales declines of the base business, despite declining Intron franchise revenues, materialized as expected in 2004, Fitch said.

Fitch said it anticipates that further declines in the Intron franchise will moderate with the growth of PEG-Intron Redi-pen and the annualizing of ribavirin generics.

The current rating reflects Schering-Plough's excellent liquidity maintained through a large cash balance, short-term securities and $1.5 billion of bank facilities, backstopping a $3.5 billion commercial paper program, the agency added.

The outlook reflects near- to intermediate-term risks of further EBITDA margin erosion and negative effects to cash flow generation, Fitch said.

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