As the global leader in credit risk ratings and research, Moody’s is uniquely positioned to assist both borrowers and investors in the capital formation process. Our business model is simple. We provide the parties in capital market transactions with tools that optimize their financing and investment opportunities. Here’s how it works.

Providing access to capital markets

Issuers of debt and the bankers that place securities with investors need credible ways to present their investment opportunities to the market. Our issuer clients tell us that they want transparency and responsiveness from their rating agency. They need authoritative, objective opinions about their financial condition that can be communicated to a global investor base. We deliver on these demands.

Transparency
We work closely with the management of rated credits to ensure that we have a full understanding of their financial, operational, and strategic plans. We provide feedback to explain the rationale for our ratings and alert borrowers to the potential rating implications of developments in their environment. Transparency of the ratings process is supported by issuer conferences, special reports on our rating methodology and analytical practices, and a variety of on-going communications, including meetings with management, site visits, and periodic newsletters targeted specifically to the interests of debt issuers.

Credibility with investors
As objective expressions of credit quality, Moody’s ratings meet issuers’ needs for credible third-party assessments that enhance the marketability of their securities. Our research relationships with investors around the world promote extensive use of our ratings by stimulating an appreciation for the accuracy and reliability of our opinions.

Helping investors price risk

On the buy-side of the markets, institutional investors tell us that they need broad rating coverage to facilitate comparisons globally, a track record of accurate judgments, and a strong professional service relationship that provides insightful research delivered in a timely manner. We continue to meet these needs, too.

Global rating coverage
Currently, Moody’s ratings cover an estimated $30 trillion of debt securities globally. That includes ratings of some 85,000 corporate and government securities issued by over 6,000 borrowers, 68,000 public finance obligations in the US municipal bond market, and nearly 15,000 structured transactions.

Peerless track record for rating accuracy
Moody’s Annual Default Studies demonstrate the accuracy of our rating judgments. The research proves empirically that Moody’s rating system works – in every decade going back to 1920, the higher the rating from Moody’s, the lower the incidence of default and credit loss.

To sustain that track record, we have a diverse group of talented analysts, supported by the latest in technology and research tools, and we maintain a rating committee process that ensures a high quality product.

Comparability
Moody’s ratings are designed to afford comparisons of credit quality across a wide range of borrowers. We organize our analytical processes to achieve this through a variety of means, with emphasis on the global, multi-industry perspective of our rating committees. As a result, Moody’s rating scale helps investors make relative judgments in their evaluation of a growing set of investment alternatives.

Timely, consultative research services
Moody’s ratings are monitored continuously. Every day, we alert market participants to changes or confirmations of our opinions. We publish research reports on individual borrowers, specific securities, industry sectors, and market developments.

Cumulative default rates for corporate bonds, 1920-2000.
In general, over the last eight decades, the lower the Moody’s rating, the higher the expected default rate for borrrowers. Some four percent of B-rated issuers have defaulted after one year. No Aaa-rated issuers have ever defaulted after one year.

Using the Internet, we provide clients with convenient desktop access to a complete archive of our research – some 400,000 individual reports going back more than 10 years. And, we offer direct access to Moody’s analysts by phone, in person, and through teleconferences and seminars.

Independent surveys consistently rank Moody’s ratings and research as the most highly regarded by investors across nearly every market sector and region. In the most recent survey by Institutional Investor, Moody’s was named the “Top Rating Agency.”

On both sides of capital markets transactions – for borrowers and investors alike – Moody’s plays an indispensable role in facilitating the debt issuance and placement process. It is this critical role that helps to ensure Moody’s full participation in the continued growth of capital markets worldwide.