Company Profile

Moody's Investors Service

Moody's Investors Service, often referred to as Moody's, 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 provides international financial research
on bonds issued by commercial and government.
The company ranks the creditworthiness of borrowers using a standardized ratings scale
which measures expected investor loss in the event of default. 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. In Moody's
Investors Service's ratings system securities are assigned a rating from Aaa to C, with Aaa
being the highest quality and C the lowest quality.
Moody's was founded by John Moody in 1909 to produce manuals of statistics related to
stocks and bonds and bond ratings. In 1975, the company was identified as a Nationally
Recognized Statistical Rating Organization (NRSRO) by the U.S. Securities and Exchange
Commission. Following several decades of ownership by Dun & Bradstreet, Moody's
Investors Service became a separate company in 2000; Moody's Corporation was established
as a holding company.

Moody's credit ratings

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. As

Moody's explains, its ratings are "not to be construed as recommendations", nor are they
intended to be a sole basis for investment decisions. In addition, its ratings dont speak to
market price, although market conditions may impact credit risk.

Standard & Poor's

Standard & Poor's Financial Services LLC (S&P) is an American financial services company.
It is a division of McGraw Hill Financial that publishes financial research and analysis
on stocks and bonds. S&P is known for its stock market indices such as the U.S.-based S&P
500, the Canadian S&P/TSX, and the Australian S&P/ASX 200. S&P is considered one of
the Big Three credit-rating agencies, which also include Moody's Investor Service and Fitch
Ratings. It has 26 offices around the world, and the head office is located on 55 Water
Street in Lower Manhattan, New York City. Standard & Poor's Ratings Services publishes
more than a million credit ratings on debt issued by sovereign, municipal, corporate and
financial sector entities. In 2013, it rated $6.6 trillion in new debt.
As a credit-rating agency (CRA), the company issues credit ratings for the debt of public and
private companies, and other public borrowers such as governments and governmental
entities. It is one of several CRAs that have been designated a nationally recognized
statistical rating organization by the U.S. Securities and Exchange Commission.

Long-term credit ratings

The company rates borrowers on a scale from AAA to D. Intermediate ratings are offered at
each level between AA and CCC (e.g., BBB+, BBB and BBB-). For some borrowers, the
company may also offer guidance (termed a "credit watch") as to whether it is likely to be
upgraded (positive), downgraded (negative) or uncertain (neutral).

History

The company traces its history back to 1860, with the publication by Henry Varnum
Poor of History of Railroads and Canals in the United States. This book compiled
comprehensive information about the financial and operational state of U.S. railroad
companies. In 1868, Henry Varnum Poor established H.V. and H.W. Poor Co. with his
son, Henry William Poor, and published two annually updated hardback guidebooks, Poor's
Manual of the Railroads of the United States and Poor's Directory of Railway Officials.
In 1906, Luther Lee Blake founded the Standard Statistics Bureau, with the view to
providing financial information on non-railroad companies. Instead of an annually published
book, Standard Statistics would use 5" x 7" cards, allowing for more frequent updates.

In 1941, Poor's Publishing and Standard Statistics merged to become Standard & Poor's
Corp. In 1966, the company was acquired by The McGraw-Hill Companies, extending
McGraw-Hill into the field of financial information services