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S&P removes LSE, Deutsche Börse from CreditWatch after merger nixed

S&P Global Ratings on April 3 removed certain ratings of Deutsche Börse AG and London Stock Exchange Group Plc from CreditWatch in the wake of the European Commission's prohibition of the two exchanges' proposed merger due to competition concerns.

Specifically, the rating agency removed LSE's counterparty credit ratings from CreditWatch with positive implications and Deutsche Börse's long-term ratings from CreditWatch with negative implications. The ratings were placed on CreditWatch on March 17, 2016.

Deutsche Börse's counterparty credit ratings were affirmed at AA/A-1+, while LSE's ratings were affirmed at BBB+/A-2. S&P also affirmed Deutsche Börse unit Clearstream Banking SA's ratings at AA/A-1+ and LCH.Clearnet Group Ltd.'s ratings at A+/A-1 and removed LCH's long-term ratings from CreditWatch negative.

S&P views the EC's prohibition of the merger as a clear setback to Deutsche Börse and LSE's strategic plans, but believes that the two exchanges, as well as Clearstream and LSE's 58%-owned LCH, are well-placed to maintain their respective current business and financial risk profiles.

The outlook on LSE is positive, reflecting S&P's view that the group could become more resilient to a hypothetical Italian sovereign default over time. The outlook on Deutsche Börse is stable, reflecting the rating agency's expectation that the German company will maintain a strong, diversified business profile.

The outlook on Clearstream Banking is stable, while the outlook on LCH is negative.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.