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Moody's rates poorly as its market shrivels; Battered shares face new threats; regulations could pinch margins.(In the Markets)
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Crain's New York Business
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April 21, 2008
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Copyright informationCOPYRIGHT 2008 Crain Communications, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: Aaron Elstein
Few companies did better during the credit bubble than Moody's Corp. Between 2000 and 2007, the venerable credit-rating agency's earnings more than quadrupled as investment banks sent mountains of subprime mortgage-backed bonds and other complex securities for its analysts to grade.
In many cases, Moody's ratings missed the mark by miles--mistakes that have cost it dearly. Not only has the market for new debt issues all but disappeared, but regulators are mulling new rules that could erode margins significantly.
Having lost half of its value over the past 12 months, Moody's stock may look like a bargain, but investors should rate it a strong ...
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