<div id="subtitle">S&P lowers Berkshire Hathaway's 'AAA' rating, citing effects from Burlington Northern purchase</div><div><p>Standard & Poor's has followed through on its warning and lowered Berkshire Hathaway Inc.'s long-term credit rating Thursday as the Omaha firm readies to acquire Burlington Northern Santa Fe Corp.</p><p>The ratings agency lowered Berkshire's rating one notch to "AA+" from "AAA," its highest designation.</p><p>S&P also removed the ratings from CreditWatch, where they were placed with negative implications in November, and called the outlook stable.</p><p>Berkshire Hathaway officials didn't immediately respond to a request for comment.</p><p>S&P said it expects a significant part of the cash portion to come from Berkshire Hathaway's core insurance operations, and the $26.3 billion railroad purchase will reduce the liquidity of the company's insurance operations.</p><p>Shareholders of BNSF are scheduled to vote on the proposed acquisition Feb. 11. The deal is expected to close by Feb. 15.</p><p>"The rating actions are based on our view that Berkshire's overall capital adequacy, as well as that of its insurance operations, has weakened to levels no longer consistent with a 'AAA' rating and is not expected to return to extremely strong levels in the near term," Standard & Poor's credit analyst John Iten said in a statement. "Furthermore, we expect that the consolidated liquidity position of Berkshire will be reduced from extremely strong historical levels as a result of the acquisition."</p><p>In the ratings agency's view, investment risk remains very high, "compounding the need for extremely strong capital and liquidity given potential investment volatility."</p><p>With the downgrade, just four U.S. industrial companies maintain S&P's "AAA" rating: Microsoft Corp., Exxon Mobil Corp., Johnson & Johnson and Automatic Data Processing Inc. More than a dozen U.S. financial institutions, including the Knights of Columbus and New York Life Insurance Co., hold the highest designation.</p><p>The acquisition of Burlington Northern Santa Fe, the nation's second-largest railroad, would be the biggest ever for Warren Buffett's Berkshire Hathaway investment company. Berkshire Hathaway, based in Omaha, Neb., owns a 22 percent stake in Burlington Northern and would buy up the rest under the deal.</p><p>Berkshire shareholders last month approved splitting the company's Class B shares 50-for-1 as part of the deal. The split will enable Berkshire to offer even small Burlington Northern shareholders Berkshire stock as part of the acquisition of the nation's second-largest railroad.</p><p>The stock split also made Berkshire's Class B stock much more affordable, at roughly $69 per share, which is expected to increase Berkshire's liquidity.</p><p>The Class A shares, which remain the most expensive U.S. stock at more than $100,000, won't be split. The Class A shares hold more voting rights than the Class B shares.</p><p>Berkshire Hathaway also filed documents Thursday indicating that it plans to sell $8 billion of debt to finance the acquisition using a combination of fixed-rate and floating-rate notes of various maturities.</p><p>The Class B shares fell $1.75, or 2.4 percent, to $72.61 in afternoon trading, losing 16 cents more in after-hours trading.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=68467606&bid=informcom" /></div><div id="copyright"><div>

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