Warren Buffett`s failure to clinch a $9 billion takeover of the Texas utility Oncor prompted S&P Global Ratings on Tuesday to say the billionaire`s Berkshire Hathaway Inc
S&P affirmed Berkshire`s "AA" rating, its third-highest grade, with a "stable" outlook after Sempra Energy
The rating agency had put Berkshire on review for a possible downgrade on July 7, reflecting concern about how adding Oncor would affect leverage.
It said the stable outlook reflects Berkshire`s solid profitability and significant cash flow, the strong competitive position of many business units, and Buffett`s focus on boosting operating profit, which totalled $17.58 billion last year.
Few U.S. companies have credit ratings as high as Berkshire`s, which itself carried a "triple-A" rating from S&P as recently as February 2010. Moody`s Investors Service rates Berkshire "Aa2," equivalent to S&P`s rating.
Barclays Capital analyst Jay Gelb said in a research report that the loss of Oncor leaves Berkshire with about $80 billion of cash for acquisitions, while leaving Buffett the cushion he wants for such things as payouts by Berkshire insurance units.
At Berkshire`s annual meeting in May, Vice Chairman Charlie Munger suggested that the Omaha, Nebraska-based conglomerate might be capable of a $150 billion acquisition.
Buffett responded that he was more "conservative," though he has long expressed a preference for buying whole businesses over making smaller investments. He turns 87 on August 30.