Standard & Poor's has lowered its long-term counterparty credit and insurer financial strength ratings on Casiopea Re SA to 'BBB+' from 'A-', and removed them from CreditWatch. The outlook is stable. The agency has also withdrawn the ratings at the request of Casiopea.

Casiopea Re is the wholly owned reinsurance affiliate of Spanish telecommunications provider Telefónica. The downgrade and removal from CreditWatch reflect the same rating actions taken on Telefónica. This followed Telefónica's declaration that its £17.bn bid for 02 PLC is now unconditional with respect to acceptances from 02's shareholders. In addition, the takeover received conditional regulatory approval from the EU.

The downgrade of Telefónica reflects the aggressive nature of the acquisition, which will result in significantly higher leverage than originally expected and involves material integration risk related to 02.