KXXV-TV News Channel 25 - Central Texas News and Weather for Waco, Temple, Killeen | S&P may downgrade Berkshire, upgrade Burlington

S&P may downgrade Berkshire, upgrade Burlington

Associated Press - November 4, 2009 6:35 PM ET

NEW YORK (AP) - Standard & Poor's is warning that Warren Buffett's bid for Burlington Northern Santa Fe Corp. could sap the liquidity and capital position of the legendary investor's insurance operations.

That could jeopardize the AAA rating of Buffett's Berkshire Hathaway Inc.

The ratings agency placed its ratings on Berkshire Hathaway on CreditWatch with negative implications. That's after Berkshire's announcement yesterday that it'll buy Fort Worth-based Burlington Northern for $26.3 billion.

Standard & Poor's said it expects a significant part of the cash portion will come from Berkshire Hathaway's core insurance operations. S&P says the transaction will reduce the liquidity and "capital adequacy" of the company's insurance operations.

Standard & Poor's Ratings Services also placed its 'BBB' corporate credit rating and other long-term ratings on railroad Burlington Northern on CreditWatch with positive implications.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.