Ratings agencies maintain views on St. Jude
Ratings agencies maintained their views on St. Jude Medical Inc. Monday after the company said it would buy vascular device maker AGA Medical Inc.
Fitch Ratings affirmed "A" rating while Moody's Investors Service backed its rating of "Baa1." Both ratings are investment grade. However the agencies took opposing views of the acquisition itself. Fitch said the deal is "strategically sound, given the new market opportunities that AGA Medical's business offers St. Jude's cardiovascular segment." Moody's was less positive, saying the purchase is "richly priced" and that St. Jude will take on more debt from the acquisition and planned stock buyback.
Fitch lowered its outlook on St. Jude to stable from positive, while Moody's added that it may upgrade AGA Medical.
St. Jude stock rose 73 cents to close at $40.63.