As it advances with a purchase of Intra-Cellular Therapies (NASDAQ:ITCI), Johnson & Johnson (NYSE:JNJ) runs the danger of losing its AAA credit rating. Concerned about the possible increase in debt connected to the acquisition, S&P Global Ratings intends to review J&J's rating.
S&P also highlights the possibility of future acquisitions supported by borrowing, which begs concerns over J&J's capacity to keep its top-tier reputation. Should downgrading, Microsoft (NASDAQ:MSFT) would be the only US corporation with a AAA rating. Just seven companies worldwide still maintain this distinction: Temasek Holdings and Public Sector Pension Investment Board.
Moody's, meantime, backs J&J's AAA rating by stressing its $20 billion cash reserve and robust cash flow. Targeting to close the sale within the year, the company intends to pay the acquisition cost using a mix of cash and borrowing
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