Bond Rating Firms Near Deal With Cuomo To Overhaul Fee Collection
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According to reports from the Wall Street Journal, a deal between the three major bond-rating firms and New York Attorney General Andrew Cuomo could be announced as soon as this week.
The Journal said the deal would overhaul the way Moody's (NYSE: MCO), McGraw-Hill's (NYSE: MHP) S&P, and Fitch collect fees for their bond ratings. Under Cuomo's plan, the rating firms would collect payments both for rating the deal and their preliminary work reviewing loans and bond structures, even whey they're not selected to provide a rating. Under the current practice, investment banks pay the firm's that rate the securities.
Link to WSJ Article
The Journal said the deal would overhaul the way Moody's (NYSE: MCO), McGraw-Hill's (NYSE: MHP) S&P, and Fitch collect fees for their bond ratings. Under Cuomo's plan, the rating firms would collect payments both for rating the deal and their preliminary work reviewing loans and bond structures, even whey they're not selected to provide a rating. Under the current practice, investment banks pay the firm's that rate the securities.
Link to WSJ Article
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