Moody's Corporation#Acquisitions

Moody's Corporation traces its history back to two publishing companies established by John Moody, the inventor of modern bond credit ratings. It was first published in 1900 by John Moody, nine years before he founded Moody's Corporation. Initially called Moody's Manual of Industrial and Miscellaneous Securities, it was later superseded by Moody's Manual of Railroads and Corporation Securities, then by Moody's Analyses of Investments.{{cite web |access-date=2010-06-13 |url=https://www.cbc.ca/news/business/debt-rating-alphabet-soup-can-spell-disaster-1.877261 |title=Debt rating alphabet soup can spell disaster |publisher=CBC |date=2010-05-13 |author=Evans, Peter }}{{cite web |access-date=2010-06-13 |url=http://www.businessweek.com/news/2009-12-23/buffett-sells-moody-s-stock-for-sixth-time-since-july-update2-.html |archive-url=https://web.archive.org/web/20091227065557/http://www.businessweek.com/news/2009-12-23/buffett-sells-moody-s-stock-for-sixth-time-since-july-update2-.html |url-status=dead |archive-date=December 27, 2009 |title=Buffett Sells Moody's Stock for Sixth Time Since July (Update2) |publisher=Bloomberg |date=2009-12-23 |author1=Frye, Andrew |author2=Leising, Matthew }}

In 1900, Moody published his first market assessment, called Moody's Manual of Industrial and Miscellaneous Securities, and established John Moody & Company.{{cite book |title=The New Masters of Capital: American Bond Rating Agencies and the Politics of Creditworthiness |last=Sinclair |first=Timothy J. |author-link=Timothy J. Sinclair |year=2005 |publisher=Cornell University Press |location=Ithaca, New York |isbn=978-0-8014-7491-0 |url=http://www.cornellpress.cornell.edu/book/?GCOI=80140100511490 |access-date=30 August 2011}} 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.{{cite web |url=http://moodys.com/Pages/atc001.aspx |title=Moody's History: A Century of Market Leadership |work=moody's.com |access-date=17 August 2011}} 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,{{cite journal |last1=White |first1=Lawrence J. |date=Spring 2010 |title=The Credit Rating Agencies |journal=Journal of Economic Perspectives |volume=24 |issue=2 |pages=211–226 |doi=10.1257/jep.24.2.211 |citeseerx=10.1.1.612.7054 }}{{cite book |title=Financial Gatekeepers: Can They Protect Investors? |last=Yasuyuki |first=Fuchita |author2=Robert E. Litan |year=2006 |publisher=Brookings Institution Press |location=Washington, D.C. |isbn=978-0-8157-2981-5 |url=http://www.brookings.edu/press/Books/2006/financialgatekeepers.aspx |access-date=30 August 2011}} 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.{{cite conference |url=http://www1.worldbank.org/finance/assets/images/Historical_Primer.pdf |title=A Historical Primer on the Business of Credit Ratings |author=Richard Sylla |author-link=Richard Sylla |date=1–2 March 2000 |conference=The Role of Credit Reporting Systems in the International Economy |publisher=The World Bank |location=Washington, D.C. |access-date=30 August 2011 |archive-url=https://web.archive.org/web/20170228070831/http://www1.worldbank.org/finance/assets/images/Historical_Primer.pdf |archive-date=28 February 2017 |url-status=dead }} By the late 1990s, Moody's superior performance compared to its parent company brought investor pressure to separate the businesses.{{cite news |title=Independent Moody's Could Be A More Vigorous Competitor |author=Lynn Sherman |newspaper=The Bond Buyer |date=16 December 1999 }} In 1998, Dun & Bradstreet sold the Moody's publishing business to Financial Communications (later renamed Mergent).{{Cite news| issn = 0099-9660| last = Reporter| first = a Wall Street Journal Staff| title = Publishing Start-Up Agrees to Buy Moody's Information Publishing Unit| work = Wall Street Journal| accessdate = 2021-08-03| date = 1998-07-16| url = https://www.wsj.com/articles/SB900553357199075500}} In December 1999, Dun & Bradstreet announced it would spin off Moody's Investors Service into a separate publicly traded company.{{cite news |title=Dun & Bradstreet Will Spin Off Moody's |author=Kenneth N. Gilpin |url=https://www.nytimes.com/1999/12/16/business/dun-bradstreet-will-spin-off-moody-s.html |newspaper=The New York Times |date=16 December 1999 |access-date=30 August 2011}} The spin-off was completed on September 30, 2000.{{cite news |title=Moody's blues |author=Louise Bowman |url=http://www.airfinancejournal.com/Article/2051700/Search/Results/Moodys-blues.html |magazine=Airfinance Journal |date=November 2000 |access-date=30 August 2011}}

In December 2022, the company was added to the Dow Jones Sustainability World Index.{{cite web | url=https://www.esgtoday.com/dow-jones-sustainability-indices-results-announced-walmart-disney-in-starbucks-ups-out/ | title=Dow Jones Sustainability Indices Results Announced: Walmart, Disney in, Starbucks, UPS Out | date=12 December 2022 }}

{{Main article|Moody's Ratings}}

Moody's Ratings, previously known as 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 Ratings 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.{{cite web |url=http://www.moodys.com/researchandratings/market-segment/home |title=Market Segment |year=2011 |work=moodys.com |publisher=Moody's Investors Service |access-date=30 August 2011}}

Moody's Ratings 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 Ratings 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.{{cite web |url=http://www.financialstabilityboard.org/publications/r_101027.pdf |title=Principles for Reducing Reliance on CRA Ratings |date=27 October 2010 |work=financialstabilityboard.org |publisher=Financial Stability Board |access-date=30 August 2011 |archive-date=November 23, 2011 |archive-url=https://web.archive.org/web/20111123113936/http://www.financialstabilityboard.org/publications/r_101027.pdf |url-status=dead }}

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.{{cite web |url=http://www.moodys.com/ratings-process/Ratings-Definitions/002002 |title=Ratings Definitions |year=2011 |work=moodys.com |publisher=Moody's Investors Service |access-date=30 August 2011}}{{cite web |url=http://www.fsa.go.jp/inter/ios/20030930/05.pdf |title=Report on the Activities of Credit Rating Agencies |date=September 2003 |publisher=The Technical Committee of the International Organization of Securities Commissions |access-date=1 December 2011}}

{{Main article|Moody's Analytics}}

Moody's, previously known as Moody's Analytics, is a subsidiary of Moody's Corporation established in 2007 to focus on non-rating activities.{{Cite news| url = https://online.wsj.com/news/articles/SB10001424052702303380004579523291675302898|title=Moody's Profit Rises 16% on Analytics Strength|author1=Timothy W. Martin |author2=Michael Calia |name-list-style=amp |publisher=The Wall Street Journal |date = April 25, 2014}} It performs economic research related to credit analysis, performance management, financial modeling, structured analysis and financial risk management. Moody's 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.{{Cite web |title=Moddy's Consulting Services LLC |url=https://www.bloomberg.com/profile/company/0142624D:US |access-date=2025-06-12 |website=Bloomberg UK}}

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. 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.,{{cite web |url=http://www.moodysanalytics.com/About-Us/History.aspx |title=Moody's Analytics History |work=moodysanalytics.com |publisher=Moody's Analytics |access-date=30 August 2011}} and Bureau van DijkBureau van Dijk{{Circular reference|date=January 2020}}.

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.{{cite web |url=http://v2.moodys.com/cust/prodserv/prodserv.aspx?source=StaticContent/Free%20Pages/Moodys%20in%20the%20community/Moodys%20Foundation/FAQ.htm&template=tmf&context=faqtmf |title=Frequently Asked Questions |year=2010 |work=moodys.com |publisher=The Moody's Foundation |access-date=30 August 2011 }}{{Dead link|date=April 2020 |bot=InternetArchiveBot |fix-attempted=yes }}

Since 2006, its main program is the annual Moody's Mega Math Challenge (M³ Challenge), a student academic challenge co-sponsored with the Society for Industrial and Applied Mathematics (SIAM),{{cite news |title=That Was Easy: Social Security Problem Solved |author=Jane Gordon |url=https://query.nytimes.com/gst/fullpage.html?res=9804E5D6153FF930A15757C0A9609C8B63&sec=&spon=&pagewanted=all |newspaper=The New York Times |date=23 April 2006 |access-date=30 August 2011}} 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.{{cite press release |title=Teens Ask: Will the Stimulus Package Work? |url=https://www.reuters.com/article/2009/04/08/idUS180799+08-Apr-2009+BW20090408 |archive-url=https://web.archive.org/web/20131019071328/http://www.reuters.com/article/2009/04/08/idUS180799+08-Apr-2009+BW20090408 |url-status=dead |archive-date=19 October 2013 |publisher=Business Wire |date=8 April 2009 |access-date=30 August 2011}}{{cite news |title=West Windsor-Plainsboro North team in top five in Moody's Math Challenge |author=Kristin Jesson Bucci |url=http://www.nj.com/mercer/index.ssf/2009/05/west_windsorplainsboro_north_t.html |newspaper=The Trenton Times |date=6 May 2009 |access-date=30 August 2011}} Since 2010.{{cite news |title=Moody's Mega Math Challenge: Wall Street's Strategic Philanthropy |author=Alice Korngold |url=http://www.fastcompany.com/blog/alice-korngold/leading-companies-good/moodyrsquos-mega-math-challenge-wall-streetrsquos-strateg |magazine=Fast Company |date=1 November 2009 |access-date=30 August 2011}}

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.{{cite web |url=http://www.moodysresearchlabs.com/Company-Info/Company-Info.aspx |title=Company Info |year=2011 |work=moodysresearchlabs.com |publisher=Moody's Research Labs |access-date=30 August 2011 }}{{Dead link|date=April 2020 |bot=InternetArchiveBot |fix-attempted=yes }} Its president was Roger Stein.{{cite web |url=http://moodysresearchlabs.com/Company-Info/Leadership-Team.aspx |title=Leadership Team |year=2011 |work=moodysresearchlabs.com |publisher=Moody's Research Labs |access-date=30 August 2011 }}{{Dead link|date=April 2020 |bot=InternetArchiveBot |fix-attempted=yes }} 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.{{cite press release |title=Moody's Analytics Launches Mortgage Portfolio Analyzer (MPA) |url=http://www.thestreet.com/story/11035415/1/moody8217s-analytics-launches-mortgage-portfolio-analyzer-mpa.html |publisher=Business Wire |date=8 March 2011 |access-date=30 August 2011 |archive-url=https://web.archive.org/web/20180919114643/https://www.thestreet.com/story/11035415/1/moody8217s-analytics-launches-mortgage-portfolio-analyzer-mpa.html |archive-date=19 September 2018 |url-status=dead }}

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.{{cite web |title=Moody's, S&P, Fitch Settle Connecticut Lawsuit Over Public Bond Ratings |url=https://www.bloomberg.com/news/2011-10-14/moody-s-s-p-fitch-settle-connecticut-lawsuit-over-public-bond-ratings.html |publisher=Bloomberg News |date=14 October 2011 |access-date=28 September 2012}}

July 2012: Moody’s said it reached a settlement with stockholders in lawsuits filed over structured finance ratings.{{cite web |title=Moody's Settles With Shareholders in Structured-Finance Suit |url=https://www.bloomberg.com/news/2012-07-24/moody-s-settles-with-shareholders-in-structured-finance-lawsuit.html |publisher=Bloomberg News |date=24 July 2012 |access-date=28 September 2012}}

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 by Abu Dhabi Commercial Bank and King County, Washington. They filed lawsuits in 2008 and 2009 that Moody's misled them by allegedly inflating ratings on two so-called structured investment vehicles they purchased.{{cite web |title=S&P, Moody's Settle Ratings Lawsuit |url=https://www.wsj.com/articles/SB10001424127887323789704578447561293487032 |work=The Wall Street Journal |date=28 April 2013 |access-date=23 June 2013}}

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 General Josh Hawley were among the 21 state signatories.{{Cite web|url=https://www.justice.gov/opa/pr/justice-department-and-state-partners-secure-nearly-864-million-settlement-moody-s-arising|title = Justice Department and State Partners Secure Nearly $864 Million Settlement with Moody's Arising from Conduct in the Lead up to the Financial Crisis|date = 13 January 2017}}

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).{{cite news |title=EU fines Moody's for failing to disclose conflicts of interests |date=30 March 2021 |url=https://www.reuters.com/article/us-moody-s-fine/eu-fines-moodys-for-failing-to-disclose-conflicts-of-interests-idUSKBN2BM0OG |work=Reuters |access-date=26 July 2021}}

In 2019, Moody's Corporation purchased the majority share in the California-based climate risk data firm, Four Twenty Seven (427), that "measures the physical risks" of "climate change".{{Cite news|issn = 0362-4331|last=Flavelle|first=Christopher|title=Moody's Buys Climate Data Firm, Signaling New Scrutiny of Climate Risks|work=The New York Times|access-date = July 25, 2019|date = July 25, 2019|url = https://www.nytimes.com/2019/07/24/climate/moodys-ratings-climate-change-data.html}} 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 in The New York Times. 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.{{cite web |last1=Wallace |first1=Mia |title=Revealed – Moody's acquires RMS |url=https://www.insurancebusinessmag.com/us/news/ma/revealed--moodys-acquires-rms-301409.aspx |website=www.insurancebusinessmag.com |publisher=Insurance Business America |access-date=7 August 2021}}

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• {{Commonscatinline}}
• {{Official|http://www.moodys.com/ }}

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• [http://www.moodysresearchlabs.com/ Moody's Research Labs]
• [http://v2.moodys.com/cust/prodserv/prodserv.aspx?source=StaticContent/Free%20Pages/Moodys%20in%20the%20community/Moodys%20Foundation/Moodys_Foundation_Index.htm&template=tmf&context=tmf The Moody's Foundation]

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Category:Business services companies of the United States

Category:Financial services companies established in 1909

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