Standard & Poor's cut its credit rating on some
Nasdaq Stock Market
bonds in light of the exchange's plan to finance its proposed $5.1 billion acquisition of the London Stock Exchange with debt.
The big rating agency reduced its rating on Nasdaq's long-term debt to "BB," down from "BB-plus," pushing the rating further into the speculative realm. S&P took the action a day after Nasdaq revealed that it had secured $5.8 billion in financing from
Bank of America
and Dresdner Kleinwort to finance the hostile bid.
Nasdaq's debt had been put on a credit watch for a possible downgrade after it launched its latest bid for the LSE last week.
"The rating actions follow Nasdaq's disclosure of the details of its financing to acquire the remaining shares of the LSE," says S&P analyst Charles Rauch. "The new ratings take into account the potential transformation in Nasdaq's franchise should it successfully acquire the LSE, but this is more than offset by Nasdaq's heavy reliance on issuing more debt to complete this transaction.''