NEW YORK (AP) -- Moody's Investors Service on Tuesday lowered the long-term debt ratings of drug maker Merck & Co.
The rating agency put Merck on review for downgrade at the beginning of May following the company's plans to buy back about $7.5 billion worth of its shares over the next 12 months. Those repurchases are part of a new $15 billion share repurchase program approved by Merck's board.
Moody's Senior Vice President Michael Levesque said Tuesday that the company's credit ratios will steadily weaken but remain solid as it completes the buyback program.
The rating agency dropped Merck's long-term ratings by one notch, including lowering its guaranteed senior unsecured rating to A1 from Aa3 and the non-guaranteed senior unsecured rating to A2 from A1. Both ratings are still in investment-grade territory. The rating outlook is stable.
Shares of Merck, based in Whitehouse Station, N.J., rose 48 cents to close at $46.65 Tuesday amid a broad market rally.