 | |
 Headquarters at7 World Trade Center | |
| Company type | Public |
|---|---|
| Industry | Business and financial services |
| Predecessor | John Moody & Company |
| Founded | 1909; 117 years ago (1909) |
| Founder | John Moody |
| Headquarters | , U.S. |
Area served | Worldwide |
Key people | |
| Revenue |  US$7.09 billion (2024) |
| US$2.88 billion (2024) | |
| US$2.06 billion (2024) | |
| Total assets | US$15.5 billion (2024) |
| Total equity | US$3.57 billion (2024) |
| Owner | Berkshire Hathaway (13.5%) |
Number of employees | 15,838 (2024) |
| Subsidiaries | |
| Website | moodys |
| Footnotes / references [1][2] | |
Moody's Corporation is an American business and financial services company. It is theholding company forMoody's Ratings (previously known as Moody's Investors Service), an Americancredit rating agency, and Moody's (previously known asMoody's Analytics), an American provider of financial analysis software and services.
Moody's was founded byJohn Moody in 1909 to produce manuals of statistics related to stocks and bonds andbond ratings. Moody's was acquired byDun & Bradstreet in 1962. In 2000, Dun & Bradstreet spun off Moody's Corporation as a separate company that was listed on theNYSE under MCO. In 2007, Moody's Corporation was split into two operating divisions: Moody's Investors Service, the rating agency, and Moody's Analytics, containing all of its other products.[3] It was included in theFortune 500 list for the first time in 2021.[4]
Moody's Corporation traces its history back to two publishing companies established by John Moody, the inventor of modernbond credit ratings. It was first published in 1900 by John Moody, nine years before he founded Moody's Corporation. Initially calledMoody's Manual of Industrial and Miscellaneous Securities, it was later superseded byMoody's Manual of Railroads and Corporation Securities, then byMoody's Analyses of Investments.[5][6]
In 1900, Moody published his first market assessment, calledMoody's Manual of Industrial and Miscellaneous Securities, and established John Moody & Company.[7] 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.[8] The1907 financial crisis fueled several changes in the markets, including the creation of theFederal Reserve System.[7] Meanwhile, Moody was forced to sell his business due to a shortage of capital.[8] Moody returned in 1909 with a new publication focused solely on railroad bonds,Analysis of Railroad Investments,[9][10] and a new company, Moody's Analyses Publishing Company.[7]
In 1962,Moody's Investors Service was bought byDun & Bradstreet, a firm engaged in the related field ofcredit reporting, although they continued to operate largely as independent companies.[11] By the late 1990s, Moody's superior performance compared to its parent company brought investor pressure to separate the businesses.[12] In 1998, Dun & Bradstreet sold the Moody's publishing business to Financial Communications (later renamedMergent).[13] In December 1999, Dun & Bradstreet announced it would spin off Moody's Investors Service into a separatepublicly traded company.[14] The spin-off was completed on September 30, 2000.[15]
In December 2022, the company was added to theDow Jones Sustainability World Index.[16]
Moody's Ratings, previously known as Moody's Investors Service, is thebond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Ratings ratesdebt securities in several market segments related topublic andcommercial securities in thebond market. These includegovernment,municipal andcorporate bonds; managed investments such asmoney market funds, fixed-income funds andhedge funds; financial institutions including banks and non-bank finance companies; and asset classes instructured finance.[17]
Moody's Ratings' closest competitors areStandard & Poor's (S&P) andFitch Group. Together, they are sometimes referred to as theBig Three credit rating agencies. Moody's Ratings and its close competitors play a key role in globalcapital markets as a supplementary credit analysis provider for banks and other financial institutions in assessing the credit risk of particular securities.[18]
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 Aaa 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.[19][20]
Moody's, previously known as Moody's Analytics, is a subsidiary of Moody's Corporation established in 2007 to focus on non-rating activities.[21] It performs economic research related tocredit analysis,performance management,financial modeling,structured analysis andfinancial risk management. Moody's also offers software and consulting services, including proprietary economic models and software tools, as well asprofessional training for the financial services sector, particularlyrisk management accreditation.[22]
Moody's Analytics started in 1995 as a business unit providingquantitative analysis services, including credit risk assessment software and services, called Moody's Risk Management Service (MRMS),[7][15] and grew through partnerships and acquisitions in the late 1990s and 2000s, expanding its client base and capabilities.[15] Acquisitions included KMV, Economy.com, Wall Street Analytics, Fermat International, Enb Consulting Ltd., The Institute of Risk Standards and Qualifications (iRSQ),CSI Global Education Inc.,[23] andBureau van Dijk.[24]
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.[25]
Since 2006, its main program has been the annualMoody's Mega Math Challenge (M3 Challenge), a student academic challenge co-sponsored with theSociety for Industrial and Applied Mathematics (SIAM),[26] in which several hundred teams of high school students usequantitative analysis and modeling to solve problems related to real-life financial topics such asSocial Security and theEconomic Stimulus Act of 2008.[27][28] The program has continued to expand since 2010.[29]
Moody's Research Labs, Inc. was abusiness incubator focused onresearch and development specializing infinancial risk modeling andanalysis, developing such products for use by other divisions of Moody's Corporation.[30] Its president was Roger Stein.[31] 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.[32] Moody's Research Labs was dissolved in February 2012.
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.[33]
July 2012: Moody's said it reached a settlement with stockholders in lawsuits filed over structured finance ratings.[34]
April 2013: Moody's reached a settlement avoiding what would have been their first jury trial over crisis-era ratings. The fourteen plaintiffs were led byAbu Dhabi Commercial Bank andKing County, Washington. They filed lawsuits in 2008 and 2009 alleging that Moody's misled them by inflating ratings on two structured investment vehicles they purchased.[35]
January 2017: Moody's Corporation, Moody's Analytics, and Moody's Investors Service reached an $863 million settlement with the U.S. Department of Justice and the attorneys general of 21 states and the District of Columbia "Arising From Conduct in the Lead up to the Financial Crisis." "The settlement resolves allegations arising from Moody's role in providing credit ratings for Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDO), contributing to the worst financial crisis since the Great Depression." Then California Attorney General Kamala Harris and then Missouri Attorney GeneralJosh Hawley were among the 21 state signatories.[36]
March 2021: Moody's reached a settlement with the European Union regarding conflicts of interest. Moody's was fined €3.7 million ($4.35 million).[37]
In 2019, Moody's Corporation purchased the majority share in the California-basedclimate risk data firm,Four Twenty Seven (427), that "measures the physical risks" of "climate change".[38] This acquisition is the "latest indication that global warming can threaten the creditworthiness of governments and companies" globally, according to a July 25, 2019 article inThe New York Times.[38] In 2021, Moody's acquired Risk Management Solutions (RMS) from Daily Mail and General Trust for $2 billion. RMS generates risk models for the insurance and reinsurance industries.[39]
Media related toMoody's at Wikimedia Commons