Standard & Poor’s May Lower Moody’s Rating

November 1, 2010 by · Leave a Comment
Filed under: The Rating Agencies 

Standard & Poor’s has announced a 50% chance that it may downgrade the short-term credit rating of Moody’s Corporation.

Listing Moody’s A1 short-term rating on CreditWatch with negative implications, S&P credit analyst Emile Courtney said in a statement, “An increased level of business risk is likely following the announcement that the Financial Reform Conference Committee has reconciled bills from the U.S. Senate and House.”

The analyst added, “The agreed upon legislation could result in a change in the applicable pleading standards for certain litigation brought against rating agencies,” making them easier to sue. “Nevertheless, we believe that Moody’s may face higher operating costs, lower margins, and increases in litigation-related event risk, which would likely increase its business risk,” she said.

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