S&P affirms LCH.Clearnet, removes negative watch

Standard & Poor's said it affirmed the A+ long-term and A-1 short-term counterparty credit ratings on LCH.Clearnet Group Ltd. and removed them from CreditWatch with negative implications, where they were originally placed in March 2012.

The outlook is stable.

S&P also said it affirmed the A- rating on the LCH.Clearnet Funding LP's perpetual preferred securities, which are guaranteed by LCH.Clearnet Group.

The original CreditWatch placement reflected a view that the group's financial profile would deteriorate after an acquisition by lower-rated London Stock Exchange plc, the agency said.

However, S&P said it sees strong protections in place that should prevent the creditworthiness of the two groups from becoming intertwined.

Although it is unusual to rate a strong subsidiary above its weaker parent, the agency said it does so when it is likely that the subsidiary's creditworthiness could be insulated from a weakening of the parent.

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