Third Shoe Finally Drops: S&P Takes Away Berkshire Hathaway's AAA Rating

Warren Buffett's Berkshire Hathaway has lost its last remaining triple-A credit rating.

Standard & Poor's dropped its ratings on Berkshire and its core subsidiaries from the top-level AAA to AA+.

S&P says Berkshire's planned acquisition of Burlington Northern Santa Fe prompted the move.

In a statement posted on its web site, S&P says "We believe that the railroad acquisition will reduce what historically has been extremely strong capital adequacy and liquidity," as Berkshire uses cash and borrowing to help finance the $26 billion deal.

S&P adds: "Investment risk remains very high in our view, compounding the need for extremely strong capital and liquidity given potential investment volatility. A key concern is that BRK's risk tolerances appear to have increased, yet we believe they remain ill defined while the organization increases in complexity."

Another concern, says S&P, is "uncertainty" surrounding who will be running Berkshire Hathaway after "the eventual transition of the company's leadership" from Warren Buffett.


S&P signaled last November that Berkshire's AAA rating was at risk when it put Berkshire on CreditWatch with "negative implications."

Today, S&P indicates it doesn't expect to lower Berkshire's rating again anytime soon, as it takes Berkshire off CreditWatch and gives it a stable outlook.

Moody's stripped Berkshire of its AAA last April. (Berkshire is Moody's largest shareholder with a stake of just under 13.5 percent, but Berkshire has been reducing that position over the past half-year.)

Back in March of 2009, Fitch was the first of the big three credit rating agencies to take away Berkshire's triple-A.

Current Berkshire stock prices:

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Class B:


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