S&P Lifts Issuer Ratings on GFI Group (GFIG) to 'BBB-', Removes from CreditWatch (BGCP)

Standard & Poor's Ratings Services said it raised its issuer credit and debt ratings on GFI Group Inc. to 'BBB-' from 'BB+' and removed them from CreditWatch. The ratings were originally placed on CreditWatch on July 30, 2014, and the implications were revised to positive on March 9, 2015. The outlook is stable.

"The rating action is based on our view that BGC Partners Inc.'s (Nasdaq: BGCP) recent announcement that it has put in place a guarantee of GFI's senior notes, coupled with its controlling ownership and plans to complete a full merger, demonstrates group support consistent with "core" group status for GFI," said Standard & Poor's credit analyst Robert Hoban.

Our issuer credit and senior debt ratings on GFI are now one notch lower than ultimate parent Cantor Fitzgerald's group credit profile ('bbb'), reflecting GFI's structural subordination as a nonoperating holding company.

The stable outlook on GFI reflects the stable outlook on Cantor Fitzgerald. The stable outlook on Cantor Fitzgerald reflects our expectation that the company will complete the sale of Trayport and use the proceeds to restore its risk-adjusted capital ratio above 10% and improve its funding and liquidity metrics over the next six months. We could lower our ratings on Cantor Fitzgerald if the company's capital and its funding and liquidity do not improve in line with our expectations. Additionally, we could lower the rating if Cantor Fitzgerald significantly increases its principal risk exposure or suffers an unexpected loss.

We could lower the ratings on GFI if BGC or Cantor were to reduce its commitment to GFI or otherwise cause us to question GFI's core strategic importance to the group. This could happen if we believed the merger and ongoing integration of GFI was at risk. We could also lower the ratings if we downgraded BGC or Cantor Fitzgerald.

We are unlikely to upgrade Cantor or GFI over the next 12 to 18 months. However, we would upgrade GFI if we upgraded Cantor Fitzgerald and BGC.

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