S&P Global Ratings on May 31 lowered the long- and short-term issuer credit ratings on Euronext NV to A-/A-2 from A/A-1 and removed the ratings from CreditWatch with negative implications, where they were placed May 21.
The downgrade reflects the expected rise in the Dutch stock exchange operator's financial leverage over the coming quarters in light of its proposed acquisition of Norway's Oslo Børs VPS Holding ASA. It also takes into account the agency's view that Euronext will maintain higher leverage in the next one to two years due to its ongoing debt-financed growth strategy.
Ratings expects Euronext to continue to be highly cash-generative and for the Oslo Børs deal to modestly enhance Euronext's revenue stability, as the acquisition will help reinforce the Dutch firm's business model by adding a presence in the Nordic market, thus improving its revenue diversity.
The outlook on the long-term issuer credit rating is stable, reflecting Ratings' view that Euronext will be able to keep its leading position as a pan-European market operator.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.