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Moody's Corporation

Company type	Public
Traded as	NYSE: MCO S&P 500 Component
Predecessor	John Moody & Company
Founded	1909 (1909)
Founder	John Moody
Headquarters	7 World Trade Center New York City, United States
Area served	Worldwide
Key people	Raymond W. McDaniel Jr. (CEO)
Revenue	$2.032 billion (2010)
Operating income	$772.8 million (2010)
Net income	$507.8 million (2010)
Number of employees	4,500
Divisions	Moody's Analytics Moody's Investors Service
Website	www.moodys.com
Footnotes / references

Moody's Corporation, often referred to as Moody's, is the holding company for Moody's Investors Service (MIS), a credit rating agency, and Moody's Analytics (MA), a provider of financial analysis software and services.

Moody's was founded by John Moody in 1909 to produce manuals of statistics related to stocks and bonds and bond ratings. The business was acquired by Dun & Bradstreet in 1962 and spun off as a separate company, organized as Moody's Corporation, in 2000. Moody's Corporation established Moody's Analytics in 2007.

History of Moody's

Moody's Corporation traces its history back to two publishing companies established by John Moody, the inventor of modern bond credit ratings. In 1900, Moody published his first market assessment, called Moody's Manual of Industrial and Miscellaneous Securities, and established John Moody & Company. The publication provided detailed statistics relating to stocks and bonds of financial institutions, government agencies, manufacturing, mining, utilities, and food companies. It experienced early success, selling out its first print run in its first two months.

By 1903, Moody's Manual was a nationally-recognized publication. The 1907 financial crisis fueled several changes in the markets, including the creation of the Federal Reserve System. Meanwhile, Moody was forced to sell his business, due to a shortage of capital. Moody returned in 1909 with a new publication focused solely on railroad bonds, Analysis of Railroad Investments, and a new company, Moody's Analyses Publishing Company.

In 1962, Moody's Investors Service was bought by Dun & Bradstreet, a firm engaged in the related field of credit reporting, although they continued to operate largely as independent companies. By the late 1990s, Moody's superior performance compared to its parent company brought investor pressure to separate the businesses. In December 1999, Dun & Bradstreet announced it would spin off Moody's Investors Service into a separate publicly traded company. The spin-off was completed on September 30, 2000 and, in the half decade that followed, the value of Moody's shares improved by more than 300%.

Moody's Investors Service

Moody's Investors Service is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Investors Service rates debt securities in several market segments related to public and commercial securities in the bond market. These include government, municipal and corporate bonds; managed investments such as money market funds, fixed-income funds and hedge funds; financial institutions including banks and non-bank finance companies; and asset classes in structured finance.

Moody's Investors Service's closest competitors are Standard & Poor's (S&P) and Fitch Group. Together, they are sometimes referred to as the Big Three credit rating agencies. Moody's Investors Service and its close competitors play a key role in global capital markets as a supplementary credit analysis provider for banks and other financial institutions in assessing the credit risk of particular securities.

According to Moody's, the purpose of its ratings is to "provide investors with a simple system of gradation by which future relative creditworthiness of securities may be gauged". To each of its ratings from Aa through Caa, Moody's appends numerical modifiers 1, 2 and 3; the lower the number, the higher-end the rating. Aaa, Ca and C are not modified this way.

Moody's Analytics

Moody's Analytics is a subsidiary of Moody's Corporation established in 2007 to focus on non-rating activities. It performs economic research related to credit analysis, performance management, financial modeling, structured analysis and financial risk management. Moody's Analytics also offers software and consulting services, including proprietary economic models and software tools, as well as professional training for the financial services sector, particularly risk management accreditation.

Moody's Analytics started in 1995 as a business unit providing quantitative analysis services, including credit risk assessment software and services, called Moody's Risk Management Service (MRMS), and grew through partnerships and acquisitions in the late 1990s and 2000s, expanding its client base and capabilities. Subsidiary companies that make up Moody's Analytics today include Moody's KMV, Economy.com, Wall Street Analytics, Fermat International, Enb Consulting Ltd., The Institute of Risk Standards and Qualifications (iRSQ) and, most recently, CSI Global Education Inc.

The Moody's Foundation

In 2002, Moody's Corporation created a corporate philanthropy program, The Moody's Foundation, focused on educational initiatives in mathematics, economics and finance. The organization offers grants to 501(c)(3) non-profits and equivalent international organizations, accredited schools and some governmental organizations. As of 2011, The Moody's Foundation has donated more than $20 million to charitable organizations. Its president is Frances Laserson.

Since 2006, its leading program is the annual Moody's Mega Math Challenge (M Challenge), a student academic challenge co-sponsored with the Society for Industrial and Applied Mathematics (SIAM), in which several hundred teams of high school students use quantitative analysis and modeling to solve problems related to real-life financial topics such as Social Security and the Economic Stimulus Act of 2008. Since 2010 the M Challenge has offered more than $100,000 in scholarships to winning students. In 2008, The Moody's Foundation was recognized by the Committee Encouraging Corporate Philanthropy for the M Challenge as representing one of the "best social responsibility programs", citing its focus on "real-world issues" and for being "clearly both in the company's interest as well as the nation's". Other Moody's academic competitions include the Euro Challenge in cooperation with the Delegation of the European Union to the United States, and the College National Fed Challenge with the Federal Reserve Bank of New York.

The Moody's Foundation has also provided support for the financial public broadcasting television program What's Up in Finance?, hosted by Kwame Jackson. Moody's Foundation is a partner of the Clinton Global Initiative and microfinance lender Kiva.org, offering training for local field staffers in how to perform credit risk assessments for more than 480,000 borrowers in 18 countries, and the development of a "scorecard and rating system" for microfinance institutions worldwide.

Moody's Research Labs

Moody's Research Labs, Inc. was a business incubator focused on research and development specializing in financial risk modeling and analysis, focused on developing such products for use by other divisions of Moody's Corporation. Its president was Roger Stein. In March 2011 Moody's Analytics announced the release of a software program developed by Moody's Research Labs, the Mortgage Portfolio Analyzer, to assist portfolio managers in managing credit risk. Moody's Research Labs was dissolved in February 2012.

Lawsuit Settlements

October 2011 - Moody’s reached a settlement resolving claims by the state of Connecticut that the credit rating company unfairly gave lower ratings to public bonds.

July 2012 - Moody’s said it reached a settlement with stockholders in lawsuits filed over structured finance ratings.

References

1. "Moody's Corporation Form 10-K". ir.moody's.com. Moody's Corporation. 28 February 2011. Retrieved 4 August 2011.
2. ^ Sinclair, Timothy J. (2005). The New Masters of Capital: American Bond Rating Agencies and the Politics of Creditworthiness. Ithaca, New York: Cornell University Press. ISBN 978-0-8014-7491-0. Retrieved 30 August 2011.
3. ^ "Moody's History: A Century of Market Leadership". moody's.com. Retrieved 17 August 2011.
4. White, Lawrence J. (Spring 2010). "The Credit Rating Agencies". Journal of Economic Perspectives. 24 (2). American Economic Association: 211–226. doi:10.1257/jep.24.2.211. Retrieved 30 August 2011.{{cite journal}}: CS1 maint: year (link)
5. ^ Yasuyuki, Fuchita (2006). Financial Gatekeepers: Can They Protect Investors?. Washington, D.C.: Brookings Institution Press. ISBN 978-0-8157-2981-5. Retrieved 30 August 2011. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
6. Richard Sylla (1–2 March 2000). A Historical Primer on the Business of Credit Ratings (PDF). The Role of Credit Reporting Systems in the International Economy. Washington, D.C.: The World Bank. Retrieved 30 August 2011.
7. Lynn Sherman (16 December 1999). "Independent Moody's Could Be A More Vigorous Competitor". The Bond Buyer. {{cite news}}: |access-date= requires |url= (help)
8. Kenneth N. Gilpin (16 December 1999). "Dun & Bradstreet Will Spin Off Moody's". The New York Times. Retrieved 30 August 2011.
9. ^ Louise Bowman (November 2000). "Moody's blues". Airfinance Journal. Retrieved 30 August 2011.
10. "Market Segment". moodys.com. Moody's Investors Service. 2011. Retrieved 30 August 2011.
11. "Principles for Reducing Reliance on CRA Ratings" (PDF). financialstabilityboard.org. Financial Stability Board. 27 October 2010. Retrieved 30 August 2011.
12. "Ratings Definitions". moodys.com. Moody's Investors Service. 2011. Retrieved 30 August 2011.
13. "Report on the Activities of Credit Rating Agencies" (PDF). The Technical Committee of the International Organization of Securities Commissions. September 2003. Retrieved 1 December 2011.
14. "Moody's Analytics History". moodysanalytics.com. Moody's Analytics. Retrieved 30 August 2011.
15. "Frequently Asked Questions". moodys.com. The Moody's Foundation. 2010. Retrieved 30 August 2011.
16. ^ "Annual Report". moodys.com. The Moody's Foundation. 2010. Retrieved 30 August 2011.
17. Caroline Preston (12 March 2009). "Despite Grim Outlook, Some Corporate Philanthropists Stay Upbeat". The Chronicle of Philanthropy. Retrieved 30 August 2011.
18. Jane Gordon (23 April 2006). "That Was Easy: Social Security Problem Solved". The New York Times. Retrieved 30 August 2011.
19. "Teens Ask: Will the Stimulus Package Work?" (Press release). Business Wire. 8 April 2009. Retrieved 30 August 2011.
20. Kristin Jesson Bucci (6 May 2009). "West Windsor-Plainsboro North team in top five in Moody's Math Challenge". The Trenton Times. Retrieved 30 August 2011.
21. Alice Korngold (1 November 2009). "Moody's Mega Math Challenge: Wall Street's Strategic Philanthropy". Fast Company. Retrieved 30 August 2011.
22. "About the M Challenge". siam.org. Society for Industrial and Applied Mathematics. Retrieved 30 August 2011.
23. Shannon Mullen (1 May 2008). "Math challenge adds up to win for teens". Asbury Park Press.
24. Matthew Kirdahy (25 February 2008). "Model Corporate Citizens". Forbes. Retrieved 30 March 2011.
25. "U.S. High School Students Solve The Euro's Challenges?" (Press release). PR Newswire. 17 March 2011. Retrieved 30 August 2011.
26. "About Euro Challenge". euro-challenge.org. European Union. 2008. Retrieved 30 August 2011.
27. "College Fed Challenge". newyorkfed.org. Federal Reserve Bank of New York. Retrieved 30 August 2011.
28. "What's Up in Finance?" (PDF) (Press release). New York Public Media. 6 March 2007. Retrieved 30 August 2011.
29. "President Bill Clinton Hosts Plenary Session on Empowering Girls and Women" (Press release). 21 September 2010. Retrieved 30 August 2011.
30. "Company Info". moodysresearchlabs.com. Moody's Research Labs. 2011. Retrieved 30 August 2011.
31. "Leadership Team". moodysresearchlabs.com. Moody's Research Labs. 2011. Retrieved 30 August 2011.
32. "Moody's Analytics Launches Mortgage Portfolio Analyzer (MPA)" (Press release). Business Wire. 8 March 2011. Retrieved 30 August 2011.
33. "Moody's, S&P, Fitch Settle Connecticut Lawsuit Over Public Bond Ratings". Bloomberg. 14 October 2011. Retrieved 28 September 2012.
34. "Moody's Settles With Shareholders in Structured-Finance Suit". Bloomberg. 24 July 2012. Retrieved 28 September 2012.

External links

• Moody's
• Moody's Analytics
• Moody's Research Labs
• The Moody's Foundation

• Companies established in 1909
• Companies established in 2000
• Companies established in 2007
• Credit rating agencies
• Financial software companies
• Economics consulting firms
• Risk management
• Multinational companies
• Financial services companies based in New York City
• Companies listed on the New York Stock Exchange