It's about time. Those three infamous credit agencies (Fitch, Moody's and S&P) aren't going to be the only cool kids on the block anymore. Investment research firm Morningstar Inc. has begun releasing corporate credit ratings for U.S. companies, effectively diluting the triumvirate's influence.
What's more, the company is going to be hiring to help with the firm's new responsibilities.
"We're primarily going to be leveraging our existing staff, but we've already hired two credit specialists," said Alexa Auerbach, a spokesperson for Morningstar. "We're looking to add 10 more to our staff of about 80 equity analysts."
So far, 100 companies in the U.S. have been given ratings, and the company plans to assign them to 1,000 within six months. The company has taken a more transparent approach toward the ratings than traditionally has been seen. All ratings can be viewed for free on the Morningstar website, and the company says it values transparency for its ratings above all else.
In order for the Morningstar to truly compete with the big three, however, it would have to apply for official recognition as a Nationally Recognized Statistical Rating Organization, which it has not yet done. Firmly entrenched agencies have the money to afford the requirements and regulations of being recognized -- whereas new entrants may not.
The company is also paving a new path for the credit rating business. Offsetting the criticism leveled at Moody's, for example, regarding its association with the companies it rates, Morningstar doesn't consult with the companies it oversees. A seemingly independent organization, indeed.
Interested in a job at Morningstar? Check out this link.
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