Moody's on Oct. 11 placed TP Icap PLC's Ba1 corporate family rating on review for downgrade.
The outlook on the rating was stable prior to the review placement.
The rating agency said the review reflects its view that the U.K. interdealer broker's financial profile has weakened due to higher costs, debt levels and CapEx, which are unlikely to decline over the near term.
Moody's noted that it expects TP Icap's pretax earnings and margin to improve only gradually over the next two years as the company focuses on the integration of Icap's voice broking unit, achieving identified cost synergies and addressing challenges from MiFID II, Brexit and revenue pressures.
Moody's said the review will look into the likelihood of TP Icap's cash flow improving over the medium term given its CapEx requirements and dividend policy, and will determine whether the company's financial policies will likely lead to a reduction in its gross leverage to a level more consistent with its ratings.