NEW YORK (Bloomberg) — Warren Buffett's Berkshire Hathaway Inc. was stripped of its last AAA credit rating by Standard & Poor's after the billionaire investor agreed to buy railroad Burlington Northern Santa Fe Corp.

Berkshire, which is taking on debt to fund the $26 billion takeover, was cut to AA+ from S&P's highest grade, the ratings firm said yesterday in a statement. The downgrade concludes a review that S&P announced on November 4, the day after Berkshire disclosed the deal for Burlington Northern.

"The railroad acquisition will reduce what historically has been extremely strong capital adequacy and liquidity," the ratings firm said.

Buffett, 79, has called the railroad acquisition an "all-in wager" on the US economy, and he's borrowing $8 billion to complete the purchase. Omaha, Nebraska-based Berkshire lost its top credit grades at Fitch Ratings in March and at Moody's Investors Service in April amid a slump in the firm's manufacturing, retail and travel businesses.

The ratings firms "are hedging their bets in the event of another economic downturn", said Michael Yoshikami, chief investment strategist at Berkshire shareholder YCMNet Advisors. Buffett's firm is "expanding in economically sensitive businesses, like the railroads", he said.

General Electric Co. and drugmaker Pfizer Inc. are among companies that lost their top credit grades from S&P in the past year. Berkshire, which Buffett built into a $170 billion company over four decades, was raised to AAA at S&P in 1989.

Buffett, Berkshire's chairman and chief executive officer, said in May that the loss of top credit grades from Fitch and Moody's had "no economic impact" on Berkshire. "My pride may be wounded just a bit," he said in a Bloomberg Television interview.

Berkshire reported its first loss since 2001 in the first quarter of 2009 as Buffett's stock bets soured. The firm returned to profit in the second and third quarters as equity indexes advanced. Still, losses at Berkshire's NetJets subsidiary and earnings declines at Clayton Homes contributed to a pretax profit plunge of more than half at Berkshire's manufacturing, service and retailing units in the first nine months of 2009.

Buffett, the second-richest American, positioned Berkshire to weather the contraction in the US economy by stockpiling $44 billion in cash. Starting in 2008, when corporate borrowing costs surged, he drew on that hoard to finance Goldman Sachs Group Inc., GE, Swiss Reinsurance Co. and the Mars Inc. takeover of chewing-gum maker Wm. Wrigley Jr. Co.