Even Warren Buffett's Getting His Credit Outlook Lowered
Standard & Poor's cuts ratings outlook on Berkshire Hathaway to 'negative'
Not even Warren Buffett is immune from a lowered credit rating outlook from Standard & Poor's. According to Reuters, the ratings agency "cut its ratings outlook" on Buffet's Berkshire Hathaway Monday afternoon in the wake of Friday's downgrade to the United States credit rating.
Five insurers--Knights of Columbus, New York Life, Northwestern Mutual, TIAA and USAA--were downgraded to "AA+" from "AAA," which was anticipated. The decision to "unexpectedly revise" the outlook on five insurers--"among them Berkshire and bond insurer Assured Guaranty"--already rated "AA+" from "stable" to "negative" was a surprise, says Reuters.
"Our view of these companies' fundamental credit characteristics has not changed," said S&P in a statement. "Rather, the rating actions reflect the application of criteria and our view that the link between the ratings on these entities and the sovereign credit ratings on the U.S. could lead to a decline in the insurers' financial strength."
We doubt this will sit well with Buffett, who this weekend argued that the United States should have a "quadruple A" credit rating, a distinction which does not presently exist.