Corporate rating agencies Moody's and Standard & Poor's (S&P) have both recently upgraded the credit ratings of German chemical and pharmaceutical producer Merck KGaA. This is the company's second upgrade since 2012.

 On July 4, Moody's raised Merck's long-term issuer rating to A3 from Baa1 with stable outlook. The agency said the upgrade takes into account "the group's well-executed cost-efficiency initiatives, which have recently contributed to a stronger cash conversion."

At the end of May, Standard & Poor's raised the long- and short-term corporate and credit issue rating of the Darmstadt-based company to A/A-1 from A-2 with stable outlook, marking the first time that a rating agency had assigned it an A rating.

S&P said its upgrade "reflects our view that Merck's credit metrics have continued to improve. In March, the company had renewed its existing €2 billion syndicated loan facility with a five-year tenor and extension options for a total of seven years.

Chief financial officer, Matthias Zachert, called the rating upgrades "a clear recognition and acknowledgement that Merck is on the right track." With the A3 rating from Moody's and the A rating from S&P, Merck said it is "comfortably positioned with the investment grade category, meaning that it will be able to benefit from attractive financing terms. (dw)