Nasdaq Risks Credit Rating to Expand With ESpeed

Acquisition of Treasuries trading platform moves exchange operator into new asset class.

For Nasdaq OMX Group Inc., the benefits of expanding into electronic bond trading justify the risk of a lower credit rating.

The second-biggest operator of American equity exchanges agreed yesterday to acquire eSpeed, a platform for U.S. Treasuries, from BGC Partners Inc. for $750 million cash, or $1.2 billion should sales goals be met. Moody’s Investors Service said Nasdaq’s Baa3 senior rating may be cut following the deal.

‘Operationally Strong’

“We also get credit for being operationally strong and for integrating our transactions well,” he said. “Hopefully all these elements will come into play here.”

Electronic Trading

The electronic trading platform for on-the-run U.S. Treasuries, including related market data and co-location businesses that Nasdaq is buying, generated about $100 million of revenue last year, less than 6 percent of BGC’s total, Howard Lutnick, its chief executive officer, said in the statement. The total sale may be about as large as BGC’s fully diluted market value, he said.

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