RSS feedRating agencies
’Rating agencies to debt issuers: don’t cite us [UPDATED]
Posted by Stacy-Marie Ishmael on Jul 19 20:06. Comment.Consider this another step away from the rating agencies’ ability to claim “free speech”.
On Monday, in response to certain aspects of the D0dd-Frank Act, Fitch said it would not allow debt issuers to include its ratings in prospectuses or debt registration statements. More…
Wall Street justice, Texas-style
Posted by Tracy Alloway on Jul 05 13:00. Comment.Things we learned this weekend:
The cost of the financial crisis to the state of Texas is estimated to be $18bn.
There is a “well-recognised” doctrine of “Quasi Sovereign Interest” for US states. More…
The rating agencies downgrade . . . the rating agencies
Posted by Tracy Alloway on Jun 30 08:40. Comment.Here’s some late Tuesday rating agency hilarity to take the edge off a Wednesday morning:
S&P Puts Moody’s Corp. ‘A-1′ Short-Term Rtg On Watch Negative
– We believe there may be added risk to U.S.-based credit rating agency Moody’s business profile following recent U.S. More…
Athens, sacked, with negative outlook
Posted by Paul Murphy on Jun 14 19:38. Comment.Moody’s chases history…
Rating agency justification for move to “Ba1″ from “A3,” etcetera:
Moody’s recognises that Athens has high reliance on central government transfers for its operations and capital investments, More…
Everyone v the rating agencies
Posted by Stacy-Marie Ishmael on Jun 02 16:28. Comment.No, it’s not déjà vu. The rating agencies are once again being hauled up before a jury of their not-quite peers.
This is not the first, nor even the second time the likes of Moody’s and Standard & More…
Einhorn: long America’s grandchildren, short rating agencies
Posted by Stacy-Marie Ishmael on May 27 15:09. Comment.Don’t let that baby face deceive you. David Einhorn has never been shy about picking fights, as Erin Callan learned to her cost.
Einhorn’s op-ed in the NY Times on Thursday was no exception. The hedgie ranged widely, More…
DBRS, or the rating agency you’ve never heard of
Posted by Stacy-Marie Ishmael on May 24 20:12. Comment.The Wall Street Journal on Monday ran an important and timely story on the continued practice of ‘ratings shopping’, in which an issuer approaches multiple agencies in an effort to get the highest possible rating: More…
Of reform, US bank ratings, and repo
Posted by Joseph Cotterill on May 21 20:35. Comment.Sweeping US finance reform is on the verge of being enacted into law, after Senate approval of a final bill. Which means further curbs on too-big-to-fail banks…
…and that is likely to mean ratings danger for large US financial institutions. More…
Fitch on Greece’s Sisyphean task
Posted by Joseph Cotterill on May 19 16:30. Comment.This week’s volatility might be Germany-induced, but the overarching fear is still at heart Greek.
And as if on cue after Greece received its first tranche of aid on Tuesday, Fitch has jumped in with a report on the future of the country’s financing. More…
Testing Re-Remics
Posted by Tracy Alloway on May 17 13:07. Comment.A Friday resecuritisation fail, via Bloomberg:
May 14 (Bloomberg) — Standard & Poor’s cut to junk the ratings on certain securities, backed by U.S. mortgage bonds, that it granted AAA grades when they were created last year by Credit Suisse Group, More…
Cuomo: Targets beyond the ratings agencies
Posted by Gwen Robinson on May 13 08:58. Comment.New York’s ever-vigilant attorney general Andrew Cuomo is at it again, this time with an investigation into whether eight banks gave misleading information to rating agencies in order to boost the ratings on particular mortgage securities. More…
The incredible quantum credit rating
Posted by Joseph Cotterill on May 11 18:45. Comment.Well, here’s an intriguingly self-reflexive comment from Moody’s.
No, it’s not a comment on its tanking share price or that Wells notice.
Instead, on Monday the rating agency looked back on the performance of its sovereign credit ratings during Europe’s debt crisis. More…
[CPDO rating error] Moody’s misses the Monday melt up
Posted by Neil Hume on May 10 16:00. Comment.One stock not joining in Monday’s eurozone bailout euphoria – a certain rating agency:
The reason – in a roundabout way – is FT Alphaville.
As FT Alphaville reported over the weekend:
Late on Friday, More…
[CPDO rating error] Moody’s receives an unwelcome (Wells) notice
Posted by Stacy-Marie Ishmael on May 09 00:27. Comment.Late on Friday, rating agency Moody’s disclosed in its quarterly 10-Q filing that it had received a Wells Notice from the SEC.
(A Wells Notice is a notification of intent to recommend that the US government pursue enforcement proceedings, More…
Moody’s in hooker heels
Posted by Joseph Cotterill on May 05 17:35. Comment.Here’s a topical cri de coeur on credit ratings agencies, from Pimco’s Bill Gross:
Tramp stamp and hooker heels do not begin to describe the sordid, nonsensical role that the rating services performed in perpetrating and perpetuating the subprime craze, More…
(sf) stands for structured finance
Posted by Tracy Alloway on Mar 16 08:15. Comment.Behold — the latest structured finance-delineating symbol:
That’s Moody’s choice for a structured finance ratings indicator to accompany all its structured finance ratings from the summer onwards, More…
Rating re-Remics
Posted by Tracy Alloway on Dec 21 10:39. Comment.Re-Remics, those recooked CDOs, made headlines this year, as financial players rushed to solve the securitisation crisis by err, engaging in more securitisation.
In fact, according to research by Amherst Securities, More…
The ECB’s delicate clean-up operation
Posted by Izabella Kaminska on Nov 24 14:58. Comment.Part of the ECB’s strategy to help ease banks off the supply of emergency liquidity — as announced on Friday — includes toughening up the criteria on collateral being pledged for its repo transactions. More…
Fed’s changes toTalf eligibility criteria may shake up rating agencies
Posted by Stacy-Marie Ishmael on Oct 05 21:52. Comment.On Monday, the Federal Reserve announced a couple of substantive changes to its criteria for evaluating asset backed securities pledged as collateral for the Talf.
Beginning in November, the Fed will conduct a “formal risk assessment” More…
Are Moody’s problems infectious?
Posted by Paul Murphy on Sep 28 16:54. Comment.Clicking through the 14-page letter of complaint sent by former Moody’s analyst Eric Kolchinsky to his ex-employer, one question springs to mind: if the rating agency really was so corrupt as to finesse investment grades so as to maximise revenue, More…
Ratings agency scrutiny not just about CDOs anymore
Posted by Stacy-Marie Ishmael on Sep 24 14:41. Comment.When Eric Kolchinsky, a recently-suspended managing director at Moody’s, deplored the rating agency’s credit policy group as weak and short staffed, and said senior managers there tend to favour revenue over quality, More…
Viva la ratings revolution
Posted by Tracy Alloway on Sep 23 17:34. Comment.Here’s some good news for the credibility of the ratings agency industry, for once.
HORSHAM, Pa., Sept. 23 /PRNewswire/ — The National Association of Insurance Commissioners (NAIC) has voted to include Realpoint as an Acceptable Rating Organization, More…
Don’t blame money market funds, blame rating agencies
Posted by Tracy Alloway on Aug 26 11:55. Comment.More sympathy for the money market funds on Wednesday, in the form of a letter to the SEC.
Recall that Obama’s economic adviser and former Fed chairman Paul Volcker set his sights on the funds, which are largely unregulated investments in ‘low-risk’ assets like commercial paper and government bonds, More…
DO NOT DIZPUTE ZE SAFETY OF THE PFANDBRIEFE!
Posted by Tracy Alloway on Aug 05 12:37. Comment.This is what happens when the rating agencies mess with the sanctity of the German covered bond – the Pfandbriefe.
From the German Bundestag:
Pfandbriefe “das sicherste Wertpapier am Kapitalmarkt”
Berlin: More…
S&P flip-flop sows confusion in CMBS market
Posted by Stacy-Marie Ishmael on Jul 23 04:20. Comment.Confidence in the dysfunctional market for securities backed by commercial mortgages has been further dented after a rating flip-flop by Standard & Poor’s, the FT reported. The rating agency, which recently changed its criteria for large numbers of bonds backed by loans for shopping malls, More…
CMBS-saga, cause and correlation
Posted by Tracy Alloway on Jul 22 10:35. Comment.FT Alphaville presents the following CMBS-saga timeline:
- May 19 – Fed announces that it will expand the Talf to include certain legacy CMBS.
- May 28 – S&P warns it will likely downgrade tens of billions of AAA-rated CMBS after tweaking its ratings methodology, More…
Curse of the underwriters
Posted by Tracy Alloway on Jul 22 08:59. Comment.A fascinating paper is out from the Federal Reserve Board, examining the role of securitisation in the expansion of subprime credit (H/T Alea).
We’ll save you the suspense and tell you the paper’s conclusion straight away: More…
Calpers vs Credit Ratings
Posted by Tracy Alloway on Jul 16 09:45. Comment.The California Public Employees’ Retirement System, Calpers, has launched a law suit against the ratings agencies Moody’s, Standard & Poor’s and Fitch.
Zero Hedge has a copy of the complaint, which not only contains a helpful summary of what’s at issue as well as some interesting details, More…
SEC to create group to check rating agencies
Posted by Stacy-Marie Ishmael on Jul 14 04:32. Comment.The SEC has created a new group of examiners to oversee credit rating agencies, which came under sharp criticism for their role during the financial crisis, the FT reported. The regulator has already adopted a number of measures to increase transparency at credit rating agencies, More…
CMBSnafu
Posted by Tracy Alloway on Jun 10 10:30. Comment.Markets are still buzzing over S&P’s proposed new ratings model for commercial mortgage-backed securities, or CMBS, and its consequence for the Talf.
Here’s the latest, from Reuters:
NEW YORK, June 9 (Reuters) – A Federal Reserve program to boost lending in U.S. More…