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Moody's Investors Services


Self Description

March 2008: "Moody's Investors Service is among the world’s most respected and widely utilized sources for credit ratings, research and risk analysis. Moody’s commitment and expertise contribute to stable, transparent and integrated financial markets, protecting the integrity of credit. In addition to our core ratings business, Moody’s provides research data and analytic tools for assessing credit risk, and publishes market-leading credit opinions, deal research and commentary, serving more than 9,300 customer accounts at some 2,400 institutions around the globe.

Moody's independence and integrity have earned us the trust of capital market participants worldwide. Our ratings and analysis track debt covering more than:

  • 100 sovereign nations
  • 12,000 corporate issuers
  • 29,000 public finance issuers
  • 96,000 structured finance obligations

Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Such independent credit ratings and research also contribute to efficiencies in fixed-income markets and other obligations, such as insurance policies and derivative transactions, by providing credible and independent assessments of credit risk.

Moody's default studies validate our predictive ratings. Our published research and investor briefings draw thousands of attendees each year and keep investors current with the rationale underlying our credit opinions.

In addition to its ratings services, Moody's publishes investor oriented credit research, including in-depth research on major debt issuers, industry studies, special comments and credit opinion handbooks. While research, analysis and data are delivered through a number of channels, most of Moody's clients use www.moodys.com for access to such services in a real-time environment.

Moody's maintains offices in most of the world’s major financial centers and employs approximately 3,000 people worldwide, including more than 1,000 analysts. The firm also has expanded into developing markets through joint ventures or affiliation agreements with local rating agencies.

Customers include a wide range of corporate and governmental issuers of securities as well as institutional investors, depositors, creditors, investment banks, commercial banks, and other financial intermediaries."

http://www.moodys.com/moodys/cust/AboutMoodys/AboutMoodys.aspx?topic=intro&redir_url=/cust/AboutMoodys/staticRedirect.asp

Third-Party Descriptions

May 2010: "For S.& P., Moody’s and Fitch, this is a war on two fronts. And while fought in vastly different realms — in courts and in Washington — the fights have this in common: either could wind up costing the rating agencies vast sums of money."

http://www.nytimes.com/2010/05/23/business/23rating.html

May 2010: "The New York attorney general has started an investigation of eight banks to determine whether they provided misleading information to rating agencies in order to inflate the grades of certain mortgage securities...The companies that rated the mortgage deals are Standard & Poor’s, Fitch Ratings and Moody’s Investors Service."

http://www.nytimes.com/2010/05/13/business/13street.html

April 2010: "Still, Lehman never told its shareholders about the arrangement. Nor did Moody’s choose to mention it in its credit ratings reports on Hudson Castle’s vehicles. Former Lehman workers, who spoke on the condition that they not be named because of confidentiality agreements with the bank, offered conflicting accounts of the bank’s relationship with Hudson Castle."

http://www.nytimes.com/2010/04/13/business/13lehman.html

September 2009: "Moody's, Standard & Poor's, and Fitch Ratings all maintained at least A ratings on AIG and Lehman Brothers up until mid-September of last year. Lehman Brothers declared bankruptcy Sept. 15; the federal government provided AIG with its first of four multibillion-dollar bailouts the next day."

http://www.huffingtonpost.com/2009/09/30/credit-rating-agency-anal_n_305587.html

November 2007: "Ms. Porter’s analysis comes as more homeowners face foreclosure. Testifying before Congress on Tuesday, Mark Zandi, the chief economist at Moody’s Economy.com, estimated that two million families would lose their homes by the end of the current mortgage crisis."

http://www.nytimes.com/2007/11/06/business/06mortgage.html

February 2005: Shelby said he was concerned that only a few rating companies control the industry. In 1975, the SEC created a national designation for credit raters: Nationally Recognized Statistical Rating Organizations, or NRSROs. The SEC initially recognized the big three raters -- Moody's Investors Service, Standard & Poor's and Fitch Ratings. Investors have come to consider the designation the U.S. government's stamp of approval. Mutual funds and other institutions use the ratings as a main criterion for investing, selecting only bonds with high-quality ratings. In 2003, the SEC added a fourth, Dominion Bond Rating Service Ltd., a small Canadian firm. There is no formal industry oversight, nor is there a process for credit raters to seek the national designation.

http://www.washingtonpost.com/wp-dyn/articles/A6212-2005Feb7.html

November 2004: Moody's Investors Service wanted to inform Zeller's firm -- the giant German insurer Hannover Re -- that it had decided to rate its financial health at no charge. But the letter went on to suggest that Moody's looked forward to the day Hannover would be willing to pay.

http://www.washingtonpost.com/wp-dyn/articles/A8032-2004Nov23.html
November 2001: One of the leading providers of objective financial information (e.g. ratings of bonds and credit worthiness).

Relationships

RoleNameTypeLast Updated
Owned by (partial or full, past or present) Moody’s Corporation Organization Mar 5, 2008

Articles and Resources

Date Fairness.com Resource Read it at:
Feb 04, 2013 U.S. Accuses S. & P. of Fraud in Suit on Loan Bundles

QUOTE: The Justice Department filed civil fraud charges late on Monday against the nation's largest credit-ratings agency, Standard & Poor's, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck....From September 2004 through October 2007, S.&P. "knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors" in certain mortgage-related securities, according to the suit filed against the agency and its parent company, McGraw-Hill Companies. S.&P. also falsely represented that its ratings "were objective, independent, uninfluenced by any conflicts of interest," the suit said.

 New York Times
May 31, 2011 S.E.C. Case Stands Out Because It Stands Alone

QUOTE: How Mr. Tourre alone came to be the face of mortgage-securities fraud has raised questions among former prosecutors and Congressional officials about how aggressive and thorough the government’s investigations have been into Wall Street’s role in the mortgage crisis.

 New York Times
May 21, 2010 Suddenly, the Rating Agencies Don’t Look Untouchable

QUOTE: several major lawsuits against the rating agencies have survived the pretrial phase and might — emphasis on might — end with huge jury verdicts or expensive settlements. In addition, a newly emboldened Congress is on the verge of overhauling financial regulation and could rewrite the rules of the industry. For S.& P., Moody’s and Fitch,...

 New York Times
May 12, 2010 Prosecutors Ask if 8 Banks Duped Rating Agencies

QUOTE: The New York attorney general has started an investigation of eight banks to determine whether they provided misleading information to rating agencies in order to inflate the grades of certain mortgage securities, according to two people with knowledge of the investigation.

 New York Times
Apr 23, 2010 Rating Agency Data Aided Wall Street in Mortgage Deals

QUOTE: One of the mysteries of the financial crisis is how mortgage investments that turned out to be so bad earned credit ratings that made them look so good. One answer is that Wall Street was given access to the formulas behind those magic ratings — and hired away some of the very people who had devised them.

 New York Times
Apr 12, 2010 Lehman Channeled Risks Through ‘Alter Ego’ Firm

QUOTE: It was like a hidden passage on Wall Street, a secret channel that enabled billions of dollars to flow through Lehman Brothers. In the years before its collapse, Lehman used a small company — its “alter ego,” in the words of a former Lehman trader — to shift investments off its books.

 New York Times
Sep 30, 2009 Credit Rating Agency Analysts Covering AIG, Lehman Brothers Never Disciplined

QUOTE: Analysts at the three biggest credit rating agencies who gave positive, investment-grade ratings to AIG and Lehman Brothers up until their collapse have not been fired or disciplined...

 Huffington Post
Sep 05, 2009 New Exotic Investments Emerging on Wall Street

QUOTE: some are dismayed by Wall Street’s quick return to its old ways, chasing profits with complicated new product

 New York Times
Jul 27, 2009 Credit card firms raise fees before law changes

QUOTE: Chase [JPMorgan Chase & Co] is but one of a number of major credit card companies that are jacking up interest rates and fees, or laying the groundwork to do so, before new federal legislation that cracks down on some of the practices goes into effect in February.

 Boston Globe
Nov 14, 2008 What Happens When Your Insurer Goes Under? (Your Money)

QUOTE: If you’re looking to switch insurance companies, start with a top-rated one, but also keep an eye out for too-good-to-be-true terms or brand new riders or features. They may not be truly battle-tested. Also, don’t stop paying premiums on your old policy until the new one is up and running.

 New York Times
Nov 06, 2007 Borrowers Face Dubious Charges in Foreclosures

QUOTE: As record numbers of homeowners default on their mortgages, questionable practices among lenders are coming to light in bankruptcy courts, leading some legal specialists to contend that companies instigating foreclosures may be taking advantage of imperiled borrowers.

 New York Times
Jul 13, 2007 Will it be harder to get credit? The problems of subprime loans hint at broader risks in financial markets

QUOTE: The rise of "derivative" securities – complex investments derived from other assets such as mortgage loans – means that even insiders can't quantify the risks or say where they lie.

 Christian Science Monitor
May 25, 2007 More Than Ever, It Pays to Be the Top Executive

QUOTE: Many experts argue that chief executives have a particular ability to drive their own pay upward, in part by manipulating directors they work closely with and encouraging the use of consulting firms that have a built-in incentive to increase pay packages for those who hire them.

 New York Times
Apr 04, 2007 Moderate-Income Home Buyers Hit by Predatory Lenders

QUOTE: The study by the Reinvestment Fund...analyzed the sales and mortgage histories of 15,500 Philadelphia properties to discern patterns of predatory lending practices, which generally impose excessive or unnecessary rates and fees, often on unwitting borrowers, many of them minorities.

 Washington Post
Feb 08, 2005 Senate Panel to Begin Hearing on Bond Raters

QUOTE: The heads of the big three credit-rating companies and their critics will face off today in a Senate Banking Committee hearing, setting the stage for a regulatory battle over an industry that has eluded controls despite mounting concerns about conflicts of interest, aggressive business practices and a lack of competition and transparency.

 Washington Post
Nov 24, 2004 Gatekeepers: Flexing Business Muscle: Credit Raters' Power Leads to Abuses, Some Borrowers Say

QUOTE: Moody's began evaluating Hannover anyway, giving it weaker marks over successive years and publishing the results while seeking Hannover's business....even as other credit raters continued to give Hannover a clean bill of health, Moody's cut Hannover's debt to junk status.

 Washington Post
Jan 31, 2002 Do Rating Agencies Make the Grade? Enron Case Revives Some Old Issues

QUOTE: Critics say both Moody's Investors Service and Standard & Poor's Corp., the nation's dominant credit raters, failed to thoroughly scrutinize Enron and moved too slowly to lower the company's ratings.

 Washington Post