S&P Puts Primary Competitor On CreditWatch, Will Moody's Retaliate?

Moody’s (NYSE: MCO) has done many bad things including leading investors in mortgage-backed securities astray by giving the risky instruments AAA ratings. Some observers even believe that the credit ratings agency had a critical role in the credit crisis.

Perhaps as a punishment for these misdeeds, Moody’s competitor S&P has put the company on CreditWatch.

“Standard & Poor’s Ratings Services today placed its ‘A-1’ short-term rating for Moody’s Corp. on CreditWatch with  negative implications.”

Perhaps it is time for Moody’s to downgrade S&P’s parent McGraw-Hill (NYSE: MHP) for the same reason.

Douglas A. McIntyre

"The CreditWatch listing reflects our view that 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, and that the
agreed upon legislation could result in a change in the applicable pleading
standards for certain litigation brought against rating agencies," said
Standard & Poor's credit analyst Emile Courtney.

According to our ratings criteria, we place ratings on CreditWatch when, in
our view, there is a 50% chance or more of a rating change, and CreditWatch
reviews can be the result of regulatory changes' impact on an issuer's
business.

Douglas A. McIntyre

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