In what could turn out to be one of those pot-calling-the-kettle-black moments, Moody’s Corp. (NYSE: MCO) ratings agency Moody’s Investors Service yesterday cut the debt rating of The McGraw-Hill Companies Inc. (NYSE: MHP) two notches, from A3 to Baa2, just two notches above junk.

Moody’s had initiated its review in September following McGraw-Hill’s announcement that it was selling its education division to Apollo Global Management LLC (NYSE: APO) for $2.5 billion.

But wait, there’s more. It is not just that Moody’s thinks that the sale of McGraw-Hill’s education division is a bad idea:

[McGraw-Hill also faces] heightened litigation risks in light of the recent civil lawsuits filed against McGraw-Hill and its subsidiary Standard & Poor’s Financial Services LLC (S&P) by the Department of Justice (DOJ) and various state attorneys general.

S&P’s defense against the DOJ charges is essentially, “Everybody was doing it.” That would include Moody’s of course. So far the Justice Department has taken no action against Moody’s or Fitch, but if, as S&P claims, everyone was rating mortgage-backed securities stuffed with subprime loans as golden, then it would seem that the DOJ would have figured that out already, and it is just a matter of time before enforcement actions are leveled against the other agencies.

And if everyone wasn’t doing it, as S&P claims, well that would be novel, to say the least.

McGraw-Hill’s shares are down about 0.3% in premarket trading this morning, at $44.86 in a 52-week range of $42.02 to $58.62.

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