S&P puts CME Group on watch

Standard & Poor's said it placed the ratings on CME Group Inc., including its AA/A-1+ counterparty credit rating, on CreditWatch negative.

The agency also said it placed the $612.5 million of 4.4% notes due 2018 issued by CME Group Index Services LLC, which is guaranteed by CME Group Inc., on CreditWatch negative.

The CreditWatch follows news that CME Group introduced a new class of clearing membership for exchange customers that conduct proprietary trading of listed interest rate products and currently clear through a member of CME Clearing, the clearinghouse division of the Chicago Mercantile Exchange.

The agency said it is concerned this program incrementally weakens the clearinghouse's financial safeguard system and represents a step toward the demututalization of risk.

S&P said it believes CME Group has introduced this new program as a means to meet a potential competitive threat from New York Portfolio Clearing, a joint venture between Depository Trust & Clearing Corp. and NYSE Euronext.

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