Updated from 10:53 a.m. EST

Fitch Ratings said Thursday it has downgraded

Merck's

(MRK) - Get Report

senior unsecured and bank loan ratings to 'AA' from 'AAA,' making it the second ratings firm this week to lower the credit rating of the drug giant.

Moody's Investors Service

cut its rating Tuesday.

Fitch said the downgrade affects approximately $6.59 billion of short- and long-term debt. At the same time, Fitch affirmed the 'F1+' commercial paper rating.

Like Moody's, Fitch said it was cutting its rating due to Merck's withdrawal of the arthritis drug Vioxx from the market on Sept. 30 and the subsequent filing of lawsuits against the company. Merck withdrew the drug after a company-sponsored test showed a higher risk of cardiovascular problems, such as heart attack or stroke, among long-term users of Vioxx vs. patients who received a placebo.

"Although a tremendous uncertainty exists regarding the total number of claimants and potential damages awarded, the final amount may be significant," Fitch said. The Department of Justice investigations and the

Securities and Exchange Commission's

informal inquiry "add another layer of potential future cash outlays," according to Fitch. Merck says it has been named as a defendant in 375 Vioxx product liability lawsuits as of Oct. 31.

Merck revealed Monday that the Justice Department is investigating the events leading up to the Vioxx withdrawal and that the Securities and Exchange Commission has begun an "informal" inquiry.

Fitch placed a "negative outlook" on Merck, a move that "reflects potential risks to cash flow generation from significant product liability litigation." The outlook also reflects lost revenues due to the Vioxx action, the effect of patent expirations on key products in the next few years "and possible penalties or fines from current government investigations."

Moody's cut Merck's rating on Tuesday, a day after Merck disclosed the Justice Department and SEC investigations. Moody's dropped its rating from Aaa to Aa2, and it held open the prospect of an additional downgrade depending on the size of Merck's Vioxx liability.

Meanwhile,

Standard & Poor's

says it will take three months to decide whether it keeps or cuts the AAA corporate credit rating on Merck.

S&P placed Merck's corporate credit and unsecured debt ratings on its CreditWatch list "with negative implications" on Nov. 1, putting Merck's AAA credit rating at risk.

S&P said it acted because of increasing concern about "the magnitude of possible litigation" involving Vioxx.

"With so many strategic concerns and uncertainties, we will have to determine whether Merck continues to warrant an 'AAA' rating," S&P said in its latest quarterly report evaluating the credit prospects of big drug companies.

And even if the Vioxx suits produce small awards or settlements, "the litigation would be a major distraction for management at a time when it is trying to revitalize its business," S&P said.

Merck's stock was down 25 cents, or 1%, to $26.16, less than $1 above its 52-week low, which is also the lowest since 1996. The stock closed at $45.07 the day before the Vioxx recall.