S&P cuts NYSE Euronext

Standard & Poor's said it lowered the long-term ratings on NYSE Euronext and its subsidiary, Euronext NV, including lowering the long-term counterparty credit ratings to AA- from AA. Both entities are on CreditWatch with negative implications.

The downgrades follow news that NYSE Euronext has served notice to terminate its existing clearing arrangements with LCH.Clearnet Ltd. and LCH.Clearnet SA, S&P said, and to build two new clearinghouses in London and Paris by year-end 2012.

This transformational project, coupled with efforts to build a new derivatives clearinghouse in the United States, signals a shift in management's risk tolerance at a time when outstanding debt remains high in relation to debt-servicing capacity for the AA rating, the agency said.

The downgrades also incorporate a belief that NYSE Euronext has not made sufficient progress to improve its financial profile, S&P said.

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