S&P lowers IAC

Standard & Poor's said it lowered its ratings on IAC/InterActiveCorp to BB from BBB- and placed them on CreditWatch with negative implications, indicating the potential for further negative rating movement.

The rating action follows the announcement that IAC plans to separate itself into five publicly traded companies, the agency said, noting that the five companies will be the new IAC surviving company, comprised mainly of Ask.com, CitySearch, Match.com and ServiceMagic; HSN, comprised mainly of retail operations and Cornerstone Brands; Ticketmaster, comprised mainly of ticketing operations and Frontline; Interval International, comprised mainly of time-share exchange and Resort Quest Hawaii; and LendingTree, comprised of the online loan exchange, Home Loan Center, and Real Estate.com.

S&P noted that the plan represents a significant departure from the company's previous strategy, adding that while the individual business units will continue to have good market positions in their respective markets, and having their own equity currencies could allow some of the companies to be more aggressive in pursuing acquisitions, the business risk profile of the individual business unit won't match the sum of all the units.

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