Moody's Investors Service

Moody's Investors Service, often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Investors Service provides international financial research on bonds issued by commercial and government entities. Moody's, along with Standard & Poor's and Fitch Group, is considered one of the Big Three credit rating agencies.

The company ranks the creditworthiness of borrowers using a standardized ratings scale which measures expected investor loss in the event of default. Moody's Investors Service rates debt securities in several bond market segments. These include government, municipal and corporate bonds; managed investments such as money market funds and fixed-income funds; financial institutions including banks and non-bank finance companies; and asset classes in structured finance.[2] In Moody's Investors Service's ratings system, securities are assigned a rating from Aaa to C, with Aaa being the highest quality and C the lowest quality.

Moody's was founded by John Moody in 1909 to produce manuals of statistics related to stocks and bonds and bond ratings. In 1975, the company was identified as a Nationally Recognized Statistical Rating Organization (NRSRO) by the U.S. Securities and Exchange Commission. Following several decades of ownership by Dun & Bradstreet, Moody's Investors Service became a separate company in 2000. Moody's Corporation was established as a holding company.

Moody's Investors Service
Subsidiary
IndustryBond credit ratings
PredecessorMoody's Analyses Publishing Company
Founded1909
Headquarters,
Number of employees
11,896[1] (2017)
ParentMoody's Corporation
Websitewww.moodys.com/researchandratings/

Role in capital markets

Together, they are sometimes referred to as the Big Three credit rating agencies. While credit rating agencies are sometimes viewed as interchangeable, Moody's, S&P and Fitch in fact rate bonds differently; for example, S&P and Fitch Ratings measure the probability that a security will default, while Moody's ratings seek to measure the expected losses in the event of a default.[3] Although Fitch has a smaller percentage of the market, it is still much larger than other rating agencies. All three operate worldwide, maintaining offices on six continents, and rating tens of trillions of dollars in securities. However, only Moody's Corporation is a free-standing company.[4]

Moody's Investors Service and its close competitors play a key role in global capital markets as three supplementary credit analysis provider for banks and other financial institutions in assessing the credit risk of particular securities. This form of third party analysis is particularly useful for smaller and less sophisticated investors, as well as for all investors to use as an external comparison for their own judgments.[5]

Credit rating agencies also play an important role in the laws and regulations of the United States and several other countries, such as those of the European Union. In the United States their credit ratings are used in regulation by the U.S. Securities and Exchange Commission as Nationally Recognized Statistical Rating Organizations (NRSROs) for a variety of regulatory purposes.[4] Among the effects of regulatory use was to enable lower-rated companies to sell bond debt for the first time; their lower ratings merely distinguished them from higher-rated companies, rather than excluding them altogether, as had been the case.[6] However, another aspect of mechanical use of ratings by regulatory agencies has been to reinforce "pro-cyclical" and "cliff effects" of downgrades. In October 2010, the Financial Stability Board (FSB) created a set of "principles to reduce reliance" on credit ranges agencies in the laws, regulations and market practices of G-20 member countries.[5] Since the early 1990s, the SEC has also used NRSRO ratings in measuring the commercial paper held by money market funds.[4]

The SEC has designated seven other firms as NRSROs,[7] including, for example, A. M. Best, which focuses on obligations of insurance companies. Companies with which Moody's competes in specific areas include investment research company Morningstar, Inc. and publishers of financial information for investors such as Thomson Reuters and Bloomberg L.P.[8]

Especially since the early 2000s, Moody's frequently makes its analysts available to journalists, and issues regular public statements on credit conditions.[6] Moody's, like S&P, organizes public seminars to educate first-time securities issuers on the information it uses to analyze debt securities.[6]

Moody's credit ratings

According to Moody's, the purpose of its ratings is to "provide investors with a simple system of gradation by which future relative creditworthiness of securities may be gauged". To each of its ratings from Aa through Caa, Moody's appends numerical modifiers 1, 2 and 3; the lower the number, the higher-end the rating. Aaa, Ca and C are not modified this way. As Moody's explains, its ratings are "not to be construed as recommendations", nor are they intended to be a sole basis for investment decisions. In addition, its ratings don’t speak to market price, although market conditions may impact credit risk.[9][10]

Moody's credit ratings
Investment grade
Rating Long-term ratings Short-term ratings
Aaa Rated as the highest quality and lowest credit risk. Prime-1
Best ability to repay short-term debt
Aa1 Rated as high quality and very low credit risk.
Aa2
Aa3
A1 Rated as upper-medium grade and low credit risk.
A2 Prime-1/Prime-2
Best ability or high ability to repay short term debt
A3
Baa1 Rated as medium grade, with some speculative elements and moderate credit risk. Prime-2
High ability to repay short term debt
Baa2 Prime-2/Prime-3
High ability or acceptable ability to repay short term debt
Baa3 Prime-3
Acceptable ability to repay short term debt
Speculative grade
Rating Long-term ratings Short-term ratings
Ba1 Judged to have speculative elements and a significant credit risk. Not Prime
Do not fall within any of the prime categories
Ba2
Ba3
B1 Judged as being speculative and a high credit risk.
B2
B3
Caa1 Rated as poor quality and very high credit risk.
Caa2
Caa3
Ca Judged to be highly speculative and with likelihood of being near or in default, but some possibility of recovering principal and interest.
C Rated as the lowest quality, usually in default and low likelihood of recovering principal or interest.

History of Moody's

Founding and early history

Moody's traces its history back to two publishing companies established by John Moody, the inventor of modern bond credit ratings. In 1900, Moody published his first market assessment, called Moody's Manual of Industrial and Miscellaneous Securities, and established John Moody & Company.[6] The publication provided detailed statistics relating to stocks and bonds of financial institutions, government agencies, manufacturing, mining, utilities, and food companies. It experienced early success, selling out its first print run in its first two months. By 1903, Moody's Manual was a nationally recognized publication.[11] Moody was forced to sell his business, due to a shortage of capital, when the 1907 financial crisis fueled several changes in the markets.[12]

Moody returned in 1909 with a new publication focused solely on railroad bonds, Analysis of Railroad Investments,[4][13] and a new company, Moody's Analyses Publishing Company.[6] While Moody acknowledged that the concept of bond ratings "was not entirely original" with him—he credited early bond rating efforts in Vienna and Berlin as inspiration—he was the first to publish them widely, in an accessible format.[6][12][14] Moody was also the first to charge subscription fees to investors.[13] In 1913 he expanded the manual's focus to include industrial firms and utilities; the new Moody's Manual offered ratings of public securities, indicated by a letter-rating system borrowed from mercantile credit-reporting firms. The following year, Moody incorporated the company as Moody's Investors Service.[11] Other rating companies followed over the next few years, including the antecedents of the "Big Three" credit rating agencies: Poor's in 1916, Standard Statistics Company in 1922,[6] and the Fitch Publishing Company in 1924.[4]

Moody’s expanded its focus to include ratings for U.S. state and local government bonds in 1919[12] and, by 1924, Moody's rated nearly the entire U.S. bond market.[11]

1930s to mid-century

The relationship between the U.S. bond market and rating agencies developed further in the 1930s. As the market grew beyond that of traditional investment banking institutions, new investors again called for increased transparency, leading to the passage of new, mandatory disclosure laws for issuers, and the creation of the Securities and Exchange Commission (SEC).[12] In 1936 a new set of laws were introduced, prohibiting banks from investing in "speculative investment securities" ("junk bonds", in modern terminology) as determined by "recognized rating manuals". Banks were permitted only to hold "investment grade" bonds, following the judgment of Moody's, along with Standard, Poor's and Fitch. In the decades that followed, state insurance regulators approved similar requirements.[4]

In 1962, Moody's Investors Service was bought by Dun & Bradstreet, a firm engaged in the related field of credit reporting, although they continued to operate largely as independent companies.[12]

1970s to 2000

In the late 1960s and 1970s, commercial paper and bank deposits began to be rated. As well, the major agencies began charging the issuers of bonds as well as investors — Moody's began doing this in 1970[6] — thanks in part to a growing free rider problem related to the increasing availability of inexpensive photocopy machines,[15] and the increased complexity of the financial markets.[11][16] Rating agencies also grew in size as the number of issuers grew,[17] both in the United States and abroad, making the credit rating business significantly more profitable. In 2005 Moody's estimated that 90% of credit rating agency revenues came from issuer fees.[18]

The end of the Bretton Woods system in 1971 led to the liberalization of financial regulations, and the global expansion of capital markets in the 1970s and 1980s.[6] In 1975, the SEC changed its minimum capital requirements for broker-dealers, using bond ratings as a measurement. Moody's and nine other agencies (later five, due to consolidation) were identified by the SEC as "nationally recognized statistical ratings organizations" (NRSROs) for broker-dealers to use in meeting these requirements.[4][19]

The 1980s and beyond saw the global capital market expand; Moody's opened its first overseas offices in Japan in 1985, followed by offices in the United Kingdom in 1986, France in 1988, Germany in 1991, Hong Kong in 1994, India in 1998 and China in 2001.[6] The number of bonds rated by Moody's and the Big Three agencies grew substantially as well. As of 1997, Moody's was rating about $5 trillion in securities from 20,000 U.S. and 1,200 non-U.S. issuers.[13] The 1990s and 2000s were also a time of increased scrutiny, as Moody's was sued by unhappy issuers and investigation by the U.S. Department of Justice,[20] as well as criticism following the collapse of Enron, the U.S. subprime mortgage crisis and subsequent late-2000s financial crisis.[6][21]

Following several years of rumors and pressure from institutional shareholders,[22] in December 1999 Moody's parent Dun & Bradstreet announced it would spin off Moody's Investors Service into a separate publicly traded company. Although Moody's had fewer than 1,500 employees in its division, it represented about 51% of Dun & Bradstreet profits in the year before the announcement.[23] The spin-off was completed on September 30, 2000,[24] and, in the half decade that followed, the value of Moody's shares improved by more than 300%.[13]

Structured finance boom and after

Structured finance went from 28% of Moody's revenue in 1998 to almost 50% in 2007, and "accounted for pretty much all of Moody's growth" during that time.[25] According to the Financial Crisis Inquiry Report, during the years 2005, 2006, and 2007, rating of structured finance products such as mortgage-backed securities made up close to half of Moody’s rating revenues. From 2000 to 2007, revenues from rating structured financial instruments increased more than fourfold.[26] However, there was some question about the models Moody's used to give structured products high ratings. In June 2005, shortly before the subprime mortgage crisis, Moody’s updated its approach for estimating default correlation of non-prime/nontraditional mortgages involved in structured financial products like mortgage-backed securities and Collateralized debt obligations. Its new model was based on trends from the previous 20 years, during which time housing prices had been rising, mortgage delinquencies very low, and nontraditional mortgage products a very small niche of the market.[27]

On July 10, 2007, in "an unprecedented move", Moody's downgraded 399 subprime mortgage-backed securities that had been issued the year before. Three months later, it downgraded another 2506 tranches ($33.4 billion). By the end of the crisis, Moody's downgraded 83% of all the 2006 Aaa mortgage backed security tranches and all of the Baa tranches.[28][29]

In June 2013, Moody's Investor Service has warned that Thailand's credit rating may be damaged due to an increasingly costly rice-pledging scheme which lost 200 billion baht ($6.5 billion) in 2011–2012.[30]

Controversies

Sovereign downgrades

Moody's, along with the other major credit rating agencies, is often the subject of criticism from countries whose public debt is downgraded, generally claiming increased cost of borrowing as a result of the downgrade.[31] Examples of sovereign debt downgrades that attracted significant media attention at the time include Australia in the 1980s, Canada and Japan in the 1990s, Thailand during the 1997 Asian financial crisis,[6] and Portugal in 2011 following the European sovereign debt crisis.[32]

Unsolicited ratings

Moody's has occasionally faced litigation from entities whose bonds it has rated on an unsolicited basis, and investigations concerning such unsolicited ratings. In October 1995, the school district of Jefferson County, Colorado sued Moody's, claiming the unsolicited assignment of a "negative outlook" to a 1993 bond issue was based on Jefferson County having selected S&P and Fitch to do its rating. Moody's rating raised the issuing cost to Jefferson County by $769,000.[33] Moody's argued that its assessment was "opinion" and therefore constitutionally protected; the court agreed, and the decision was upheld on appeal.[13]

In the mid-1990s, the U.S. Justice Department's antitrust division opened an investigation to determine whether unsolicited ratings amounted to an illegal exercise of market power,[20] however the investigation was closed with no antitrust charges filed. Moody's has pointed out that it has assigned unsolicited ratings since 1909, and that such ratings are the market's "best defense against rating shopping" by issuers. In November 1999, Moody's announced it would begin identifying which ratings were unsolicited as part of a general move toward greater transparency.[6] The agency faced a similar complaint in the mid-2000s from Hannover Re, a German insurer that lost $175 million in market value when its bonds were lowered to "junk" status.[4][34][35] In 2005, unsolicited ratings were at the center of a subpoena by the New York Attorney General's office under Eliot Spitzer, but again no charges were filed.[13]

Following the 2008 financial crisis, the SEC adopted new rules for the rating agency industry, including one to encourage unsolicited ratings. The intent of the rule is to counteract potential conflicts of interest in the issuer-pays model by ensuring a "broader range of views on the creditworthiness" of a security or instrument.[36][37]

Alleged conflicts of interest

The "issuer pays" business model adopted in the 1970s by Moody's and other rating agencies has been criticized for creating a possible conflict of interest, supposing that rating agencies may artificially boost the rating of a given security in order to please the issuer.[4] The SEC recently acknowledged, however, in its September 30, 2011 summary report of its mandatory annual examination of NRSROs that the subscriber-pays model under which Moody’s operated prior to adopting the issuer pays model also "presents certain conflicts of interest inherent in the fact that subscribers, on whom the NRSRO relies, have an interest in ratings actions and could exert pressure on the NRSRO for certain outcomes".[38] Other alleged conflicts of interest, also the subject of a Department of Justice investigation the mid-1990s, raised the question of whether Moody's pressured issuers to use its consulting services upon threat of a lower bond rating.[39] Moody's has maintained that its reputation in the market is the balancing factor, and a 2003 study, covering 1997 to 2002, suggested that "reputation effects" outweighed conflicts of interest. Thomas McGuire, a former executive vice president, said in 1995 that: "[W]hat’s driving us is primarily the issue of preserving our track record. That’s our bread and butter".[40]

Financial crisis of 2007–2008

The global financial crisis of the late 2000s brought increased scrutiny to credit rating agencies' assessments of complex structured finance securities. Moody's and its close competitors were subject to criticism following large downgrade actions beginning in July 2007.[41][42] According to the Financial Crisis Inquiry Report, 73% of the mortgage-backed securities Moody's had rated triple-A in 2006 were downgraded to junk by 2010.[43] In its "Conclusions on Chapter 8", the Financial Crisis Inquiry Commission stated: "There was a clear failure of corporate governance at Moody’s, which did not ensure the quality of its ratings on tens of thousands of mortgage-backed securities and CDOs."[44]

Faced with having to put more capital against lower rated securities, investors such as banks, pension funds and insurance companies sought to sell their residential mortgage-backed securities (RMBS) and collateralized debt obligation (CDO) holdings.[45] The value of these securities held by financial firms declined, and the market for new subprime securitizations dried up.[46] Some academics and industry observers have argued that the rating agencies' mass downgrades were part of the "perfect storm" of events leading up to the financial crisis in 2008.[45][47][48][49]

In 2008, a study group established by the Committee on the Global Financial System (CGFS), a committee of the Bank for International Settlements, found that rating agencies had underestimated the severity of the subprime mortgage crisis, as had "many market participants". According to the CGFS, significant contributing factors included "limited historical data" and an underestimation of "originator risk" factors. The CGFS also found that agency ratings should "support, not replace, investor due diligence" and that agencies should provide "better information on the key risk factors" of structured finance ratings. In October 2007, Moody's further refined its criteria for originators, "with loss expectations increasing significantly from the highest to the lowest tier". In May 2008, Moody's proposed adding "volatility scores and loss sensitivities" to its existing rankings.[21][50] Although the rating agencies were criticized for "technical failings and inadequate resources", the FSB stated that the agencies' "need to repair their reputation was seen as a powerful force" for change.[5] Moody's has in fact lost market share in certain sectors due to its tightened rating standards on some asset-backed securities, for example the commercial mortgage-backed securities (CMBS) market in 2007.[51]

In April 2013, Moody's, along with Standard & Poor's and Morgan Stanley, settled fourteen lawsuits filed by groups including Abu Dhabi Commercial Bank and King County, Washington. The lawsuits alleged that the agencies inflated their ratings on purchased structured investment vehicles.[52]

In January 2017, Moody's agreed to pay nearly $864 million to settle with the Department of Justice, other state authorities and Washington. A fine of $437.5 million would be paid to the DOJ, and the remaining $426.3 million penalty would be split among 21 states and the District of Columbia.[53][54]

Global Credit Research

In March 2013 Moody's Investors Service published their report entitled Cash Pile Grows 10% to $1.45 Trillion; Overseas Holdings Continue to Expand in their Global Credit Research series, in which they examined companies they rate in the US non-financial corporate sector (NFCS). According to their report, by the end of 2012 the US NFCS held "$1.45 trillion in cash", 10% more than in 2011. At the end of 2011, US NFCS held $1.32 trillion in cash which was already a record level.[55] "Of the $1.32 trillion for all the rated companies, Moody's estimates that $840 billion, or 58% of the total cash, is held overseas."[56]

See also

References

  1. ^ "Moody's". Fortune. Retrieved 2019-01-22.
  2. ^ "Market Segment". moodys.com. Moody's Investors Service. 2011. Retrieved 30 August 2011.
  3. ^ Felix Salmon (9 August 2011). "The difference between S&P and Moody's". Reuters.
  4. ^ a b c d e f g h i White, Lawrence J. (Spring 2010). "The Credit Rating Agencies". Journal of Economic Perspectives. 24 (2): 211–226. CiteSeerX 10.1.1.612.7054. doi:10.1257/jep.24.2.211.
  5. ^ a b c "Principles for Reducing Reliance on CRA Ratings" (PDF). financialstabilityboard.org. Financial Stability Board. 27 October 2010. Retrieved 30 August 2011.
  6. ^ a b c d e f g h i j k l m Timothy J. Sinclair (2005). The New Masters of Capital: American Bond Rating Agencies and the Politics of Creditworthiness. Cornell University Press.
  7. ^ "Credit Rating Agencies – NRSROs". sec.gov. U.S. Securities and Exchange Commission. Retrieved 30 August 2011.
  8. ^ "Zacks Analyst Blog Highlights: Moody's Corp, Thomson-Reuters Corp., RiskMetrics Group Inc., Dun & Bradstreet Corp. and Interactive Data Corporation". zacks.com. 5 March 2010. Retrieved 30 August 2011.
  9. ^ "Ratings Definitions". moodys.com. Moody's Investors Service. 2011. Retrieved 30 August 2011.
  10. ^ "Report on the Activities of Credit Rating Agencies" (PDF). The Technical Committee of the International Organization of Securities Commissions. September 2003. Retrieved 1 December 2011.
  11. ^ a b c d "Moody's History: A Century of Market Leadership". moody's.com. Retrieved 17 August 2011.
  12. ^ a b c d e Richard Sylla (1–2 March 2000). A Historical Primer on the Business of Credit Ratings (PDF). The Role of Credit Reporting Systems in the International Economy. Washington, D.C.: The World Bank. Retrieved 30 August 2011.
  13. ^ a b c d e f Yasuyuki, Fuchita; Robert E. Litan (2006). Financial Gatekeepers: Can They Protect Investors?. Washington, D.C.: Brookings Institution Press. ISBN 978-0-8157-2981-5. Retrieved 30 August 2011.
  14. ^ Richard S. Wilson (1987). Corporate Senior Securities: Analysis and Evaluation of Bonds, Convertibles, and Preferreds. Chicago: Probus.
  15. ^ White, Ben (31 January 2002). "Do Rating Agencies Make the Grade?; Enron Case Revives Some Old Issues". The Washington Post.
  16. ^ White, Lawrence J. (24 January 2009). "Agency Problems—And Their Solution". The American. American Enterprise Institute. Archived from the original on 2 November 2013. Retrieved 1 December 2011.
  17. ^ Clarke, Thomas (2009). European corporate governance: readings and perspectives. Taylor & Francis. p. 15. ISBN 9780415405331. Retrieved 1 December 2011.
  18. ^ "Moody's Corporation Form 10-K Filing 2005" (PDF). files.shareholder.com. Moody's Corporation. 8 March 2005. Retrieved 30 August 2011.
  19. ^ "Oversight of Credit Rating Agencies Registered as Nationally Recognized Statistical Rating Organization" (PDF). sec.gov. Securities and Exchange Commission. 2 February 2007. Retrieved 8 November 2011.
  20. ^ a b "Watching the Watchers: Justice Department Launches Probe of Moody's Ratings". Tulsa World. 28 March 1996.
  21. ^ a b "Ratings in structured finance: what went wrong and what can be done to address shortcomings?". CGFS Papers. Committee on the Global Financial System. 32. July 2008.
  22. ^ Lynn Sherman (16 December 1999). "Independent Moody's Could Be A More Vigorous Competitor". The Bond Buyer.
  23. ^ Kenneth N. Gilpin (16 December 1999). "Dun & Bradstreet Will Spin Off Moody's". The New York Times. Retrieved 30 August 2011.
  24. ^ Louise Bowman (November 2000). "Moody's blues". Airfinance Journal. Retrieved 30 August 2011.
  25. ^ McLean, and Nocera. All the Devils Are Here, 2010 (p.124)
  26. ^ Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States, p.118
  27. ^ The Financial Crisis Inquiry Report (PDF). National Commission on the Causes of the Financial and Economic Crisis in the United States. 2011. p. 147.
  28. ^ The Financial Crisis Inquiry Report (PDF). National Commission on the Causes of the Financial and Economic Crisis in the United States. 2011. pp. 221–2.
  29. ^ "1 AFGI070708.ppt Subprime Crisis: Timeline of Rating Agency Actions Excerpted from a July 2008 AFGI Report" (PDF). Archived from the original (PDF) on 25 April 2012. Retrieved 25 July 2013.
  30. ^ Maierbrugger, Arno (6 June 2013). "Moody's threatens to downgrade Thailand". Inside Investor. Retrieved 6 June 2013.
  31. ^ Jason Raznick (8 July 2011). "How to Profit from European Threats Against Rating Agencies". Forbes.
  32. ^ Wolfgang Münchau (10 July 2011). "Don't blame Moody's for a messy euro crisis". The Financial Times.
  33. ^ Jefferson County School District No. R-1 v. Moody’s Investor’s Services, Inc., 175 F.3d 848 (1999).
  34. ^ Alec Klein (24 November 2004). "Credit Raters' Power Leads to Abuses, Some Borrowers Say". The Washington Post. Retrieved 30 August 2011.
  35. ^ Kevin D. Hall (18 October 2009). "How Moody's sold its ratings – and sold out investors". McClatchy. Archived from the original on 11 February 2010. Retrieved 26 August 2011.
  36. ^ "Re-Proposed Amendments to Rule 17g–5" (PDF). Federal Register. U.S. Government Printing Office. 9 February 2009. Retrieved 6 December 2011.
  37. ^ "New Information-Posting Requirements for Issuers, Sponsors and Underwriters of Rated Structured Finance Securities". sidley.com. Sidley Austin LLP. 4 March 2010. Archived from the original on 5 March 2012. Retrieved 6 December 2011.
  38. ^ "2011 Summary Report of Commission Staff's Examinations of Each Nationally Recognized Statistical Rating Organization" (PDF). sec.gov. Securities and Exchange Commission. 30 September 2011. Retrieved 17 October 2011.
  39. ^ "Moody's denies threatening firms with lower ratings". Miami Herald. 29 June 1996.
  40. ^ Becker, Bo; Milbourn, Todd (2011). "How did increased competition affect credit ratings?". Journal of Financial Economics. 101 (3): 493–514. doi:10.1016/j.jfineco.2011.03.012.
  41. ^ The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States (PDF). Washington, DC: U.S. Government Printing Office. January 2011. pp. xxv, 221–222, 226. ISBN 978-0-16-087727-8. Archived from the original (PDF) on 12 January 2012. Retrieved 3 November 2011.
  42. ^ Alec Klein (28 August 2011). "Ratings Firms Defend Assessment of Loan Securities". The Washington Post. Retrieved 3 November 2011.
  43. ^ The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States (PDF). Washington, DC: U.S. Government Printing Office. January 2011. p. 122. ISBN 978-0-16-087727-8. Archived from the original (PDF) on 12 January 2012. Retrieved 15 June 2013.
  44. ^ The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States (PDF). Washington, DC: U.S. Government Printing Office. January 2011. p. 155. ISBN 978-0-16-087727-8. Archived from the original (PDF) on 12 January 2012. Retrieved 15 June 2013.
  45. ^ a b United States Senate Permanent Subcommittee on Investigations (13 April 2011). "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse" (PDF). Majority and Minority Staff Report. Committee on Homeland Security and Governmental Affairs. p. 6. Retrieved 8 November 2011.
  46. ^ United States Senate Permanent Subcommittee on Investigations (13 April 2011). "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse" (PDF). Majority and Minority Staff Report. Committee on Homeland Security and Governmental Affairs. pp. 6, 57. Retrieved 8 November 2011.
  47. ^ Selig, Kevin. "Greed, Negligence or System Failure? Credit Rating Agencies and the Financial Crisis" (PDF). The Kenan Institute for Ethics, Duke University. Retrieved 8 November 2011.
  48. ^ Friedman, Jeffrey (January – February 2010). "A Perfect Storm of Ignorance". Cato Policy Report. Cato Institute. Archived from the original on 8 November 2011. Retrieved 8 November 2011.
  49. ^ Tomlinson, Richard; Evans, David (31 May 2007). "CDO Boom Masks Subprime Losses, Abetted by S&P, Moody's, Fitch". Bloomberg L.P. Retrieved 30 August 2011.
  50. ^ Richard Cantor; Nicolas Weill; Warren Kornfel (May 2008). "Introducing assumption volatility scores and loss sensitivities for structured finance securities" (PDF). Moody's Global Credit Policy. Moody's Corporation. Retrieved 30 August 2011.
  51. ^ Kemba J. Dunham (18 July 2007). "Moody's Says It Is Taking Hit; Ratings Firm Loses Business as Tougher CMBS Stance Spurs Issuers to 'Rate Shop'". The Wall Street Journal.
  52. ^ Jeannette Neumann (26 April 2013). "S&P, Moody's Settle Ratings Lawsuit". The Wall Street Journal. Retrieved 10 July 2013.
  53. ^ "Moody's pays $864 million to U.S., states over pre-crisis ratings". Reuters. 14 January 2017. Retrieved 14 January 2017.
  54. ^ "Moody's to pay nearly $864 million to settle claims it inflated ratings". CBS. Retrieved 14 January 2017.
  55. ^ "Announcement: Moody's: US companies' cash pile grows 10% in 2012, to $1.45 trillion". Global Credit Research. New York. 18 Mar 2013.
  56. ^ Cash Pile Grows 10% to $1.45 Trillion; Overseas Holdings Continue to Expand (Report). Moody's Investors Service.
  57. ^ ICRA Limited

External links

Atlantic Health System

Atlantic Health System (AHS) is a not-for-profit private healthcare company that operates hospitals and health care facilities in New Jersey. The president and chief executive of Atlantic Health System is Brian A. Gragnolati, and the chairman of the Board of Trustees is Dexter Earle.Moody's Investors Service raised its rating for the health care organization from A1 to Aa3, the highest rating among all health care systems in New Jersey, with an outlook of "stable" in 2017.In 2017, AHS listed 16,407 employees and 4,796 physicians. With 1,860 beds 88,361 admissions were registered.

In 2013, the company was ranked 49th among Fortune’s list of "100 Best Companies to Work For." In 2014 they were listed as 25th, in 2015 they were ranked 39th and in 2016 they were ranked 79th.

Bahrain Islamic Bank

Bahrain Islamic Bank is a commercial bank based in Manama, Bahrain, founded in 1979.

It is the first islamic bank in the Kingdom of Bahrain, works under supervision of the Central Bank of Bahrain and is listed on the Bahrain Stock Exchange

In January 2016 the Moody's Investors Service confirmed its ratings and upgraded the standalone baseline credit assessment (BCA) to b3 from caa1.

Black Sea Trade and Development Bank

The Black Sea Trade and Development Bank (BSTDB) is international financial institution serving its eleven member countries that are founding members of the Black Sea Economic Cooperation, a regional economic organization. It supports economic development and regional cooperation by providing loans, guarantees, and equity for development projects and trade transactions. BSTDB supports both public and private enterprises in member countries and does not attach political conditionality to its financing.Objectives of the bank include promoting regional trade links, cross country projects, foreign direct investment, supporting activities that contribute to sustainable development, with an emphasis on the generation of employment in the member countries, ensuring that each operation is economically and financially sound. The bank has an authorized capital of EUR 3.45 billion.BSTDB is governed by the Agreement Establishing the Black Sea Trade and Development Bank, a United Nations registered treaty. The Agreement came into force on January 24, 1997. BSTDB commenced its operational activities in June 1999.

Moody's Investors Service rates BSTDB "A2" long term with stable outlook.

Standard & Poor's rating agency assigned to BSTDB a long term issuer rating of "A-" with stable outlook.

Credit Rating Agency Reform Act

The Credit Rating Agency Reform Act is a United States federal law whose goal is to improve ratings quality for the protection of investors and in the public interest by fostering accountability, transparency, and competition in the credit rating agency industry.Enacted after being signed by President Bush on September 29, 2006, it amended the Securities Exchange Act of 1934 to require nationally recognized statistical rating organizations (NRSROs) to register with the Securities and Exchange Commission (SEC).Critics had complained that the dominance of "the big three" rating agencies – Standard & Poor's Ratings Services, Moody's Investors Service and the smaller Fitch Rating—were in part responsible for the subprime mortgage crisis of 2006–8. The agencies rated 98% of the trillions of dollars of home-mortgage oriented "structured investment" products. Hundreds of billions of dollars' worth of securities given the agencies highest—triple-A – rating were later downgraded to "junk" status, and the writedowns and losses came to over half a trillion dollars.The Act permitted smaller, newer credit rating agencies to register as “statistical ratings organizations". The intent of the U.S. Congress was to increase the choice for consumers by opening the market to a greater number of ratings agencies, and also to incent accurate and reliable ratings.

DBRS

DBRS is a global credit rating agency (CRA) founded in 1976 (originally known as Dominion Bond Rating Service) in Toronto. Its current ownership group, led by The Carlyle Group and Warburg Pincus, announced the purchase of the company in December 2014.DBRS, which has offices in Toronto, New York, Chicago, London, Frankfurt and Madrid, is the fourth-largest credit rating agency by global market share, with approximately between 2% and 3% of global market share. DBRS comprises four affiliated operating companies – DBRS Limited; DBRS, Inc.; DBRS Ratings Limited; DBRS Ratings GmbH; and DBRS Ratings GmbH, Sucursal en España.

Stephen Joynt was named CEO in August 2016, having previously served as chairman of the board. Mr. Joynt previous served as CEO of Fitch Ratings.Registered with the U.S. Securities and Exchange Commission (SEC) as a Nationally Recognized Statistical Rating Organization (NRSRO) pursuant to the Credit Rating Agency Reform Act of 2006 (CRA Reform Act) and the rules adopted thereunder.

DBRS is registered as a Nationally Recognized Statistical Rating Organization from the United States' Securities and Exchange Commission (SEC), one of only 10 companies to hold the designation.Registered as a CRA in the European Union (EU) in accordance with Regulation (EC) No 1060/2009 of the European Parliament, amended by Regulation (EU) No 513/2011 and No 462/2013 on CRAs (the EU CRA Regulation).and with the Ontario Securities Commission (OSC) in Canada.

The company is one of only four CRAs, including larger competitors Standard & Poor's, Moody's Investors Service, and Fitch Ratings, to receive ECAI recognition from the European Central Bank (ECB). That designation indicates CRAs whose ratings can be used by the ECB to determine collateral requirements for borrowing from the ECB. In recent years, DBRS's sovereign ratings on European nations, including Portugal, Ireland and Italy, were used by the ECB for such purposes.On May 29th, 2019, Morningstar, Inc. Announced their acquisition of DBRS which is subject to regulatory approval.

Eric Smidt

Eric Smidt is an American businessman. He is Chairman and CEO of Harbor Freight Tools, which operates over 800 retail hardware stores in 47 states and generated revenue of approximately $2 billion according to an April, 2012 Moody's Investors Service report.

Ernest Addison Moody

Ernest Addison Moody (1903–1975) was a noted philosopher, medievalist, and logician as well as a musician and scientist. He served as professor of philosophy at University of California, Los Angeles (UCLA), where he also served as department chair, and Columbia University. He has an annual memorial conference in his name on the subject of medieval philosophy. He was president of the American Philosophical Association from 1963-1964.

His father was John Moody, founder of the US credit rating agency Moody's Investors Service.

Farm Credit Bank of Texas

Farm Credit Bank of Texas, part of the US Farm Credit System, serves as a wholesale lender and business-service provider to 14 local borrower-owned Farm Credit associations in Alabama, Louisiana, Mississippi, New Mexico and Texas.Farm Credit Bank of Texas is a federated cooperative owned by the local Farm Credit association cooperatives, which directly finance rural real estate, agricultural production, country homes and agribusiness firms. Together with the other three banks of the Farm Credit System (AgFirst Farm Credit Bank, Columbia, South Carolina; AgriBank FCB, St. Paul, Minnesota; and CoBank, ACB, Denver, Colorado), the bank generates funds from the issuance of debt securities in the national and international financial markets through the Federal Farm Credit Banks Funding Corporation, a joint subsidiary of the banks of the Farm Credit System. These debt securities are the joint and several liabilities of the banks of the Farm Credit System and are neither guaranteed by the federal government nor backed by the full faith and credit of the federal government. The Farm Credit Insurance Fund is available to protect investors in Farm Credit System debt securities.As of September 2008, the long-term debt of the Farm Credit System carries the ratings of AAA from Standard & Poor's Rating Service and Fitch Ratings and AAA from Moody's Investors Service. As of the same date, the Farm Credit System's short-term debt carries the ratings of A-1+, F1+ and P-1, respectively, from the three rating agencies.

Financial Guaranty Insurance Company

Financial Guaranty Insurance Company (FGIC) is a monoline bond insurer established in 1983. It faced significant financial difficulties in 2008 which affected its ability to write new business.

The firm was acquired in December 2003 by a consortium of investors including PMI Group, Blackstone Group, The Cypress Group and CIVC Partners.As of March 24, 2009, it was rated "CC" by Standard & Poor's (S&P) and "Caa3" by Moody's Investors Service. Fitch Ratings had already withdrawn its rating, while Moody's announced it would remove its rating. The ratings are negative from both Moody's and Standard & Poor's.On November 24, 2009, it was released that the New York Insurance Department ordered FGIC to suspend payment on all claims due. On June 11, 2012, the company was placed under rehabilitation by the Department.On April 9, 2014, the Detroit News reported that FGIC without any City of Detroit or court involvement had solicited bids for the Detroit Institute of Arts collection. The city had previously hired Christie's to estimate the value and worked out a plan with philanthropic groups in Michigan to preserve one of the nation's best art collections.

Six months later, on October 16, lawyers for FGIC and Detroit disclosed in court that they had reached a settlement of FGIC's claims against the city. Under the deal, which must still be approved by the court along with other issues in the Detroit bankruptcy, the city and the state of Michigan would pay for the demolition of Joe Louis Arena, currently home to the Detroit Red Wings of the NHL. The arena site is planned to be available for transfer in 2017 when the Red Wings move into Little Caesars Arena. FGIC would then receive the arena site and an adjacent parking lot, giving the company nearly 9 acres (3.6 ha) that it would then redevelop.

John Moody (financial analyst)

John Moody (May 2, 1868 – February 16, 1958) was an American financial analyst, businessman and investor. He pioneered the rating of bonds and founded Moody's Investors Service. Moody's Manuals are still issued, carrying on the tradition begun by Moody's Manual of Railroads and Corporation Securities and continued by the annual Moody's Analyses of Investments.

List of countries by credit rating

This is a list of countries by credit rating, showing long-term foreign currency credit ratings for sovereign bonds as reported by the three major credit rating agencies: Standard & Poor's, Fitch, and Moody's. The ratings of DBRS, Scope, China Chengxin, Dagong and JCR are also included. The list also includes all country subdivisions issuing sovereign bonds, but it excludes regions, provinces and municipalities issuing sub-sovereign bonds.

MBIA

MBIA, Inc. is a financial services company. It was founded in 1973 as the Municipal Bond Insurance Association. It is headquartered in Purchase, New York, and as of January 1, 2015 had approximately 180 employees. MBIA is the largest bond insurer.

Moody's (disambiguation)

Moody's most often refers to Moody's Investors Service, an American credit-rating agency.

Other uses of the term may include:

In business:

Moody's Analytics, a global risk management software company based in New York City, USA

Moody's Corporation, parent company of Moody's Investors Service and Moody's Analytics

Moodyz, a Japanese adult video producerPlaces:

Moody's Corner, Nova Scotia, CanadaOther:

Moody (disambiguation)

Moody (surname)

Moody's Aaa Bond

Moody's Aaa Corporate Bond, also known as "Moody's Aaa" for short is an investment bond that acts as an index of the performance of all bonds given an Aaa rating by Moody's Investors Service. This corporate bond is often used in macroeconomics as an alternative to the federal ten-year Treasury Bill as an indicator of the interest rate. Moody's and other investment companies have other less common investment bonds that are also used.

Moody's Seasoned Aaa Corporate Bond Yield are available at the St. Louis FRED database:

Daily

Weekly

Monthly

Moody's Analytics

Moody's Analytics is a subsidiary of Moody's Corporation established in 2007 to focus on non-rating activities, separate from Moody's Investors Service. It provides economic research regarding risk, performance and financial modeling, as well as consulting, training and software services. Moody's Analytics is composed of divisions such as Moody's KMV, Moody's Economy.com, Moody's Wall Street Analytics, the Institute of Risk Standards and Qualifications, and Canadian Securities Institute Global Education Inc.

Moody's Corporation

Moody's Corporation, often referred to as Moody's, is an American business and financial services company. It is the holding company for Moody's Investors Service (MIS), an American credit rating agency, and Moody's Analytics (MA), an American provider of financial analysis software and services.

Moody's was founded by John Moody in 1909 to produce manuals of statistics related to stocks and bonds and bond ratings. Moody's was acquired by Dun & Bradstreet in 1962. In 2000, Dun & Bradstreet spun off Moody's Corporation as a separate company that was listed on the NYSE under MCO. In 2007, Moody's Corporation was split into two operating divisions, Moody's Investors Service, the rating agency, and Moody's Analytics, with all of its other products.

Raymond W. McDaniel Jr.

Raymond W. McDaniel Jr. is an American financial executive. He is president and chief executive officer of Moody's Corporation, the parent company of Moody's Investors Service and Moody's Analytics.

Temasek Holdings

Temasek Holdings Private Limited (abbreviated as Temasek) is a Singaporean holding company. It is owned by the Government of Singapore. Incorporated in 1974 as a Commercial Investment Company, Temasek owns and manages a net portfolio of $308 billion (as of 31 March 2018), with S$16 billion divested and S$29 billion invested during the year, and 68% exposure to Asia – 27% Singapore and 41% Asia ex-Singapore. It is an active shareholder and investor, and its investments are guided by four key themes – transforming economies, growing middle income populations, deepening comparative advantages and emerging champions. Its portfolio covers a broad spectrum of sectors including financial services, telecommunications, media and technology, transportation and industrials, life sciences and agribusiness, consumer and real estate, energy and resources, as well as multi-sector funds. Headquartered in Singapore, Temasek has a multinational team of 730 people, in 11 global offices including 2 offices in Beijing, and 1 office in Shanghai, Mumbai, Hanoi, London, New York, San Francisco, Mexico City, Washington, D.C., Sao Paulo.Temasek differs from many sovereign wealth funds because it invests mostly in equities, is the outright owner of many assets, and pays taxes like other commercial investment firms.Temasek has credit ratings of “AAA/Aaa” by Standard & Poor's Global Ratings and Moody's Investors Service respectively since their inaugural ratings in 2004. Temasek has also attained perfect quarterly scores on the Linaburg-Maduell Transparency Index, a measure of the openness of government-owned investment funds.

Timothy J. Sinclair

Timothy J. Sinclair is a political scientist who has written extensively on the political economy of global finance. He is an expert on the American credit rating agencies, Moody's Investors Service and Standard & Poor's.

Sinclair was born in Taumarunui, New Zealand, and was educated at the University of Canterbury in Christchurch and York University in Toronto. Sinclair joined the University of Warwick in 1995. During 2001/2002, Sinclair was Visiting Scholar at Harvard University's Weatherhead Center for International Affairs.

This page is based on a Wikipedia article written by authors (here).
Text is available under the CC BY-SA 3.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.