Oct. 15, 2009 (Business Wire) -- As a result of Pfizer Inc.'s (Pfizer) completed acquisition of Wyeth today for approximately $67 billion, Fitch Ratings has downgraded Pfizer's Issuer Default Rating (IDR) to 'AA-' from 'AA', and senior unsecured debt and bank loan ratings to 'AA-' from 'AA'. Simultaneously, Fitch has also upgraded Wyeth's IDR to 'AA-' from 'A-', and senior unsecured debt and bank loan ratings to 'AA-' from 'A-'.

Fitch has affirmed Pfizer's 'F1+' short-term IDR and commercial paper rating. The ratings have been removed from Rating Watch Negative, originally placed on Jan. 26, 2009. Pfizer's ratings are as follows:

--Long-term IDR to 'AA-' from 'AA';

--Senior unsecured debt rating to 'AA-' from 'AA';

--Bank loan rating to 'AA-' from 'AA';

--Short-term IDR at 'F1+';

--Commercial paper rating at 'F1+'.

The ratings apply to approximately $39.5 billion of debt. The Rating Outlook is Stable.

Fitch has simultaneously upgraded Wyeth's short-term IDR and commercial paper rating to 'F1+' from 'F2'. The ratings have been removed from Rating Watch Positive, originally placed on Jan. 26, 2009. Additionally, Fitch has withdrawn the short-term IDR, commercial paper rating and bank loan rating. Wyeth's ratings are as follows:

--Long-term IDR to 'AA-' from 'A-';

--Senior unsecured debt rating to 'AA-' from 'A-'.

The ratings apply to approximately $11.5 billion of debt. The Rating Outlook is Stable.

Today, Pfizer completed the acquisition of Wyeth for approximately $67 billion. The company utilized new debt to finance one-third of the price, while cash on-hand and equity were used for the balance with each representing a third of the total asset purchase. As such, debt jumped to $39.5 billion from $17.3 billion, and leverage increased to 1.8 times (x) from 0.8x for the latest 12-month (LTM) period at the end of the second quarter of 2009 versus 2008, respectively. Pro forma leverage including Wyeth financial results for the same period was 1.7x.

The Wyeth purchase aids in mitigating the revenues gap arising from the looming patent expiration in November 2011 of Pfizer's (and the world's) highest-selling pharmaceutical, Lipitor. The cholesterol-lowering drug generated sales of $11.7 billion in the LTM period ending June 28, 2009. Reliance on Lipitor revenues fell to 17.1% of pro forma revenues, from 25.3% of total Pfizer stand-alone revenues. Fitch anticipates concentration to further ease to around 13% by the end of 2010. On the other hand, Wyeth brings a product portfolio with two maturing multiple blockbuster medicines: Effexor-XR, which losses U.S. patent protection in July 2010; and Enbrel, that sees the potential U.S. patent expiry in November 2012 followed by a three-year phase-out of the co-promotion agreement with Amgen, Inc.