- Standard & Poor's
company_name = Standard & Poor's
company_type = Division of The McGraw-Hill Companies
foundation = 1860, present corporation status in 1941
New York City
origins = Merger of Poor's Publishing & Standard Statistics
key_people = Deven Sharma (President)
homepage = [http://www.standardandpoors.com www.standardandpoors.com]
Standard & Poor's (S&P) is a division of
McGraw-Hillthat publishes financial research and analysison stocks and bonds. It is one of the top three companies in this business, along with Moody'sand Fitch Ratings.
It is well known for its US-based
S&P 500, the Australian S&P/ASX 200 stock market index, the Canadian S&P/TSX, the Italian S&P/MIBand India's S&P CNX Nifty.
Standard & Poor's operates as a financial services company. Its products and services include credit ratings, equity research, S&P indices, funds ratings, risk solutions, governance services, evaluations, and data services. The company’s division, Capital IQ, provides information and workflow solutions to financial institutions, advisory firms, and corporations. Capital IQ provides integrated financial information and technology solutions, including auditable company financials, a screener combining financial and nonfinancial items, an integrated public and private capital market database, and various relationship development tools. The company serves institutional professionals, financial institutions, corporations, financial advisors, and individual investors worldwide.
Standard & Poor's traces its history back to 1860, with the publication by
Henry Varnum Poorof "History of Railroads and Canals in the United States". This book was an attempt to compile comprehensive information about the financial and operational state of U.S. railroad companies. Henry Varnum went on to establish "H.V. and H.W. Poor Co" with his son, Henry William, and published updated versions of this book on an annual basis.
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.
The company as it is known today was formed in 1941 with the merger of Poor's Publishing (the successor company to H.V and H.W Poor Co) and Standard Statistics.
In 1966 S&P was acquired by "The McGraw-Hill Companies", and now encompasses the Financial Services division.cite web| title=A History of Standard & Poor's | url=http://www2.standardandpoors.com/spf/html/media/SP_TimeLine_2006.html | accessdate=May 9 | accessyear=2007 ]
Standard & Poor's is a
credit rating agencythat issues credit ratings for the debt of corporations, be they public or private. It is one of several CRAs that have been designated a Nationally Recognized Statistical Rating Organizationby the U.S. Securities and Exchange Commission.
It issues both short-term and long-term credit ratings.
Long-term credit ratings
S&P rates borrowers on a scale from AAA to D. Intermediate ratings are offered at each level between AA and CCC (i.e., BBB+, BBB and BBB-). For some borrowers, S&P may also offer guidance (termed a "credit watch") as to whether it is likely to be upgraded (positive), downgraded (negative) or uncertain (neutral).
*AAA : the best quality borrowers, reliable and stable (many of them governments)
*AA : quality borrowers, a bit higher risk than AAA
*A : economic situation can affect finance
*BBB : medium class borrowers, which are satisfactory at the moment
Non-Investment Grade (also known as
*BB : more prone to changes in the economy
*B : financial situation varies noticeably
*CCC : currently vulnerable and dependent on favorable economic conditions to meet its commitments
*CC : highly vulnerable, very speculative bonds
*C : highly vulnerable, perhaps in bankruptcy or in arrears but still continuing to pay out on obligations
*CI : past due on interest
*R : under regulatory supervision due to its financial situation
*SD : has selectively defaulted on some obligations
*D : has defaulted on obligations and S&P believes that it will generally default on most or all obligations
*NR : not rated
Short-term issue credit ratings
S&P rates specific issues on a scale from A-1 to D. Within the A-1 category it can be designated with a plus sign (+). This indicates that the issuer's commitment to meet its obligation is extremely strong. Country risk and currency of repayment of the obligor to meet the issue obligation are factored into the credit analysis and reflected in the issue rating.
*A-1 : obligor's capacity to meet its financial commitment on the obligation is strong
*A-2 : is susceptible to adverse economic conditions however the obligor's capacity to meet its financial commitment on the obligation is satisfactory
*A-3 : adverse economic conditions are likely to weaken the obligor's capacity to meet its financial commitment on the obligation
*B : has a significant speculative characteristics. The obligor currently has the capacity to meet its financial obligation but faces major ongoing uncertainties that could impact its financial commitment on the obligation
*C : currently vulnerable to nonpayment and is dependent upon favourable business, financial and economic conditions for the obligor to meet its financial commitment on the obligation
*D : is in payment default. Obligation not made on due date and grace period may not have expired. The rating is also used upon the filing of a bankruptcy petition.
tock market indices
Standard & Poor's publishes a large number of stock market indices, covering every region of the world, market capitalization level, and type of investment (e.g. indices for
REITs and preferred stocks)
Standard & Poor's publishes a near-weekly (48 times a year)
stock marketanalysis newsletter called "The Outlook" which is issued both in print and online to subscribers.
Credit rating agenciessuch as Standard & Poor's have been subject to criticism in the wake of large losses beginning in 2007 in the collateralized debt obligation(CDO) market that occurred despite being assigned top ratings by the CRAs. For instance, losses on $340.7 million worth of collateralized debt obligations (CDO) issued by Credit Suisse Group added up to about $125 million, despite being rated AAA by Standard & Poor's.Citation
last = Tomlinson
first = Richard
last2 = Evans
first2 = David
title = CDOs mask huge subprime losses, abetted by credit rating agencies
newspaper = International Herald Tribune
year = 2007
date = 2007-06-01
url = http://www.iht.com/articles/2007/05/31/bloomberg/bxinvest.php]
A. M. Best
Dominion Bond Rating Service
Nationally Recognized Statistical Rating Organizations
Global Industry Classification Standard
* [http://www.standardandpoors.com Standard and Poor's website]
* [http://www.outlook.standardandpoors.com Standard and Poor's The Outlook website]
* [http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/aboutsp_ch/4,2,2,0,0,0,0,0,0,0,0,0,0,0,0,0.html History of Standard and Poor's ]
* [http://www.washingtonpost.com/ac2/wp-dyn/A5572-2004Nov22?language=printer Credit Raters Exert International Influence]
* [http://www.alacrastore.com/publisher-rss/s-and-p-credit-research RSS Feed of Most Recent S&P Reports]
* [http://www.CommerceSearchEngine.com/market.php S&P Daily Valuation Report]
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