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Moody’s Investors Service (MCO), today (Thursday) cut Berkshire Hathaway Inc.’s (BRK.A, BRK.B) top-level Aaa credit rating by two notches, despite Berkshire chief Warren Buffett’s status as the ratings agency’s biggest shareholder.
Moody’s was the last major ratings agency to downgrade the Berkshire, after Fitch Ratings Inc. stripped the company of its top rating almost four weeks ago, saying it believed “AAA ratings are not appropriate at the holding company level for financial-oriented enterprises.”
Standard & Poor’s Inc. followed two weeks later with an announcement it had placed Berkshire’s credit under review.
With the cut to Berkshire’s rating Moody’s no longer has a Aaa rating on any significant financial-services company. In fact, only four companies of any kind still have triple-A ratings from both S&P and Moody’s: American Data Processing (ADP), ExxonMobil Corp. (XOM), Johnson & Johnson (JNJ), and Toyota Motor Corp. (ADR: TM).
Moody’s, whose parent company is 20%-owned by Berkshire, risked losing credibility by standing firm with its credit rating on Berkshire. With the double-notch downgrade, it may have chosen credibility over upsetting its largest shareholder.