S&P Global Ratings
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| S&P Global Ratings | |
|---|---|
| Name | S&P Global Ratings |
| Type | Division of S&P Global |
| Industry | Financial services |
| Founded | 1860 (as Standard & Poor's predecessors) |
| Headquarters | New York City, United States |
| Key people | * Dina Dublon (example) |
| Parent | S&P Global |
S&P Global Ratings S&P Global Ratings is a credit rating agency that provides credit analysis, research, and ratings for issuers and debt instruments. It is a division of S&P Global and operates alongside other subsidiaries within a multinational financial information and analytics group that serves markets such as New York City, London, Tokyo, and Hong Kong. The division's ratings influence capital markets, sovereign borrowing, corporate finance, and structured finance decisions involving participants like JPMorgan Chase, Goldman Sachs, Deutsche Bank, and Bank of America.
History
S&P Global Ratings traces its lineage to the 19th century through predecessors including Henry Varnum Poor, The Railroad Manual publishers, and the merged entities that formed Standard & Poor's in the 20th century. Throughout the 1900s it provided ratings that affected issuers such as General Electric, U.S. Steel, and sovereign borrowers like United Kingdom and France. In the late 20th and early 21st centuries it expanded into rating products including structured finance instruments tied to markets such as mortgage-backed securities, collateralized debt obligations, and transactions involving institutions like Lehman Brothers and Bear Stearns. Major corporate events included consolidation parallel to firms like Moody's Investors Service and Fitch Ratings, and the broader evolution of S&P Global corporate strategy aligned with firms such as McGraw-Hill Companies and CME Group.
Corporate structure and ownership
As a division, the entity operates under corporate governance structures similar to S&P Global and reports to boards and executives akin to those at multinational corporations such as BlackRock and Vanguard Group. Its parent company engages with institutional stakeholders including State Street Corporation, The Vanguard Group, and institutional investors from regions including European Union member states and Japan. Executive oversight interacts with regulatory regimes in jurisdictions like United States Securities and Exchange Commission, European Securities and Markets Authority, and national regulators in Canada and Australia. Strategic partnerships and competitive positioning relate to firms such as Bloomberg L.P., Thomson Reuters, and Morningstar, Inc..
Credit ratings methodology
The agency's methodology encompasses analysis of financial statements from issuers like Apple Inc., ExxonMobil, and Toyota Motor Corporation, macroeconomic indicators monitored by institutions such as International Monetary Fund, World Bank, and Bank for International Settlements. It uses criteria for sovereigns, corporates, financial institutions, and structured finance similar in purpose to approaches at Moody's Investors Service and Fitch Ratings but with proprietary models comparable to analytics from S&P Global Market Intelligence. Rating committees and governance draw on practices seen in International Organization of Securities Commissions guidance and academic research from universities such as Harvard University, London School of Economics, and University of Chicago. Methodological changes have been influenced by crises including the 2008 financial crisis, regulatory reforms like the Dodd–Frank Wall Street Reform and Consumer Protection Act, and litigation involving counterparties such as Countrywide Financial.
Products and services
The division offers credit ratings on entities and instruments including sovereign debt issued by nations like Germany, Brazil, and India; corporate bonds from firms such as Microsoft and Volkswagen; and structured products linked to markets like residential mortgage-backed securities and commercial mortgage-backed securities. Ancillary services include credit research, risk analytics, scenario analysis, and indices comparable to products from S&P Dow Jones Indices, MSCI, and FTSE Russell. It supplies data platforms and subscription services used by asset managers such as BlackRock, insurance companies like AIG, and pension funds including CalPERS.
Market position and controversies
The firm holds a leading position alongside Moody's Investors Service and Fitch Ratings in global bond market influence, with market share shaped by relationships with investment banks such as Morgan Stanley and underwriting syndicates involving Citigroup. Controversies have centered on ratings of structured products before the 2008 financial crisis, disputes with issuers and litigants including Banco Santander and Countrywide Financial, and debate over potential conflicts of interest similar to concerns raised about the issuer-pays model discussed in relation to Moody's and Fitch. Public scrutiny has come from media outlets like The Wall Street Journal, The New York Times, and regulatory hearings in United States Congress.
Regulation and legal matters
Regulatory oversight involves agencies such as the United States Securities and Exchange Commission, European Securities and Markets Authority, and national supervisors in jurisdictions like Japan Financial Services Agency and Monetary Authority of Singapore. Legal matters have included litigation and settlements connected to ratings performance in episodes tied to subprime mortgage crisis litigation and enforcement actions influenced by statutes such as provisions under the Dodd–Frank Wall Street Reform and Consumer Protection Act. Ongoing dialogue with standards bodies includes participation in forums alongside International Organization of Securities Commissions and engagement with academic, legal, and policy institutions like Columbia Law School and Brookings Institution.