Investment Week (October 20)
“The UK’s credit rating has been downgraded by Moody’s amid a looming economic hit from the coronavirus pandemic and the forthcoming Brexit deadline.” The UK’s sovereign debt status dropped “one notch to Aa3, from Aa2,” with the ratings agency “noting that Britain’s growth has been meaningfully weaker than expected and is likely to remain so in the future.”
Tags: Aa3, Brexit, Coronavirus, Credit rating, Deadline, Debt, Downgraded, Economic hit, Looming, Moody's, Pandemic, Sovereign, UK
Financial Times (December 2)
“Investors are becoming increasingly concerned about how climate risks will impact their portfolios.” TCI, one activist hedge fund, “has warned Airbus, Moody’s, Charter Communications and other companies to improve their pollution disclosure or it will vote against their directors and called for asset owners to fire fund managers that did not insist on climate transparency.”
Tags: Activist, Airbus, Asset owners, Charter, Climate risks, Directors, Disclosure, Fund managers, Hedge-fund, Impact, Investors, Moody's, Pollution, Portfolios, TCI, Vote
Bloomberg (September 16)
Standard & Poors became the latest credit-rating company to downgrade Japan, following earlier moves by Moody’s and Fitch. “Could the Japan downgrade presage a stampede for the exits by international investors? Unlikely.” Most JGB investors are domestic “and probably won’t be concerned about the verdict of U.S. financial services companies, especially ones with the questionable reputations of the credit raters.” Japanese investors will continue to “view Japanese bonds as the ultimate safe zone.”
Tags: Credit rating, Downgrade, Fitch, Investors, Japan, JGBs, Moody's, Reputations Bonds, Safe, Standard & Poors, U.S.
New York Times (August 18)
“Brazil is in tatters. The economy is in a deepening recession.” On top of that Petrobras is facing a “massive corruption scandal” and the country’s credit rating was just downgraded by Moody’s. “In all this turbulence, it is easy to miss the good news: the fortitude of Brazil’s democratic institutions.” Specifically, “in pursuing bribery at Petrobras, federal prosecutors…have not been deterred by rank or power, dealing a blow to the entrenched culture of immunity among government and business elites.”
Tags: Brazil, Bribery, Business, Corruption, Credit rating, Democratic institutions, Downgraded, Economy, Elites, Government, Immunity, Moody's, Petrobras, Power, Prosecutors, Rank, Recession, Scandal
South China Morning Post (December 1)
Moody’s downgraded Japan’s credit rating by one notch from Aa3 for to A1. “Despite the rating cut, Moody’s noted that Japan was not in a disastrous situation.” The Post explains that “Japan, which once led the world in innovation, is facing stiff competition from emerging nations including China, while a falling number of working-age people is shrinking its tax base even as soaring ranks of seniors strain the public purse.”
Tags: China, Competition, Credit rating, Downgrade, Emerging nations, Innovation, Japan, Moody's, Seniors, Tax base
New York Times (March 23)
“It’s the one question about the 2008 financial crisis that people still ask me more than any other: Why have regulators done so little to rein in the credit rating agencies?” Despite abuses which helped create the sub-prime crisis and despite numerous resolutions to revise the regulatory environment for firms like S&P and Moody’s, little has been done. “Ratings still loom large, even after they were found to have been so disastrously inaccurate in 2008. It’s yet another example of the glacial pace of regulatory change.”
Tags: Abuses, Credit rating agencies, Financial Crisis, Moody's, Ratings, Regulators, S&P, Sub-prime crisis
Wall Street Journal (January 17)
Over the past 5 years, the EU has been suffering from “a kind of schizophrenia about the role that credit-rating agencies such as Moody’s, Standard & Poor’s and Fitch should play in the markets.” Some of the reforms have been hare-brained, like trying to silence downgrades, but the latest package is on target with a proposal to write the agencies out of EU law. “Denying ratings any sort of official status is the best reform for a business that has long dined out on the privileged position that regulators granted them. It should also really be the only reform you need.”
Tags: Credit-rating agencis, EU law, Fitch, Moody's, Official status, Regulators, S&P
Los Angeles Times (September 12)
In the U.S. a fiscal cliff is approaching when tax cuts expire on January 1, government spending is scheduled for automatic reduction and limits on government borrowing will be reached. “The message from the analysts at Moody’s and S&P is that lawmakers can’t keep putting off the day of reckoning. Moody’s set a reasonable condition for avoiding a downgrade: adopting policies that stabilize, then reduce the debt as a percentage of the U.S. economy over the next several years.”
Wall Street Journal (June 21)
In a move that “could add to the unease plaguing global markets,” Moody’s “downgraded more than a dozen global banks, including the five largest U.S. banks with global trading arms, to reflect declining profitability in an industry that is being rocked by soft economic growth, tougher regulations and nervous investors.”
Wall Street Journal (January 20, 2012)
“Run up spending and debt, raise taxes in the naming of balancing the budget, but then watch as deficits rise and your credit-rating falls anyway.” The Journal describes not a European country, but the State of Illinois, which was just downgraded by Moody’s to A2, the worst rating of all 50 states. Among other problems, Illinois “has $6.8 billion in unpaid bills and unaddressed obligations” and a pension fund which covers less than half of its projected liabilities.
“Run up spending and debt, raise taxes in the naming of balancing the budget, but then watch as deficits rise and your credit-rating falls anyway.” The Journal describes not a European country, but the State of Illinois, which was just downgraded by Moody’s to A2, the worst rating of all 50 states. Among other problems, Illinois “has $6.8 billion in unpaid bills and unaddressed obligations” and a pension fund which covers less than half of its projected liabilities.
