Standard & Poor's
| Standard & Poor's
|
|
|---|---|
 |
|
| legal form | Division of McGraw-Hill Inc. |
| founding | 1941 |
| Seat | New York City |
| management | Douglas Peterson |
| Number of employees | 8500 |
| sales | $ 2.9 billion (2010) |
| Branch | Financial service providers |
| Website | www.standardandpoors.com |
Standard and Poor's Corporation ( S&P ) is an internationally known credit rating agency . It was created in 1941 from the merger of the US companies HV & HW Poor Co. and Standard Statistics Bureau . S&P has been a McGraw-Hill subsidiary since 1966 . The core area of the company is the assessment and analysis of other commercial enterprises, banks and states with regard to their creditworthiness . S & P is the dominant rating agency in addition to the smaller companies Moody's and Fitch Ratings , collectively known as the Big Three (English big three are referred to). In addition, S&P creates numerous stock indices of the American stock exchanges and commodity indices . In addition to the company's headquarters in New York City, there are 35 locations in financial centers around the world, nine of which are in Europe, including Frankfurt .
Market position
S&P dominates the world market with a 40 percent market share. The return on sales of S & P in 2011 was over 40 percent.
According to their own information, S&P and Moody's assessed over a million loans in 2009. About 1000 analysts per agency were involved in this task. The agencies charge the issuer of the bond 3 to 4 basis points for each assessment, depending on the issue volume. In addition to the pricing of individual issues, there is a price model for large companies and banks that often take out loans, a kind of “flat rate”. The revenues appear small, but it is the bulk that generates the high profits. The result is also promoted by the low costs that the rating agencies have, especially in their small personnel area. Rudolf Hickel calls the three rating agencies a “private license to chop money”.
Credit scales
Standard & Poor’s uses the following credit ratings ("rating codes"), which do not differ significantly from the assessment criteria of the other two major rating agencies:
Conditioning Worthy (English investment grade )
- AAA: Reliable and stable debtors, top quality
- AA: Good debtors, slightly higher risk than AAA
- A: The overall economic situation must be taken into account
- BBB: Medium-quality debtors who are currently acting satisfactorily
Speculative (English non-investment grade or speculative )
- BB: Very dependent on the overall economic situation
- B: The financial situation is notoriously changeable
- CCC: Speculative, low debtor income
- CC: like CCC
- C: like CCC
- CI: outstanding interest payments
- SD: Payment default in some areas
- R: under regulatory supervision, possibly selective late payment / default in the future
- D: in default of payment
- NR: Not rated (english rated not )
The rating codes from AA to CCC can be modified by adding the characters + or - to indicate a finer gradation within a credit rating; Example: AA + and AA− .
These credit ratings are intended for the consideration of rather long-term investments; there is a shortened second scale for the short term.
Bonds with speculative credit rating (BB and worse) are referred to as high-yield bonds , junk bonds and junk bonds (English high yield bonds or junk bonds ), respectively. As compensation for their high probability of default, they promise high returns. High-yield bonds, for example, are issued by emerging countries , but also by medium-sized companies with poor credit ratings, which still have to pay less interest on such bonds than on a bank loan.
It is also possible that investment-worthy bonds that have already been issued will be severely downgraded during the term and thus become junk bonds (an example are Greece bonds during the Greece crisis 2011/2012).
A credit rating merely expresses the probability with which a company or state - according to the rating agency - will meet its debt service obligations ( i.e. , pay off its debts). It is not a buy recommendation. The division of credit ratings into investment-worthy and speculative is more recent and, to a certain extent, arbitrary.
See also: Rating (contains a comparison table with the credit scales of the most important rating agencies)
S&P indices
The company publishes the following stock and commodity indices:
criticism
Due to the great influence of the rating grades on the actions of many market participants, the methods used are sometimes viewed extremely critically. When the US was downgraded, for example, the US Treasury Department complained that S&P had ignored two trillion US dollars. In 2011, the SEC initiated an investigation into the calculation methods. Allegedly due to a computer glitch, S&P mistakenly distributed a report about France's downgrade. On December 6, 2011, S&P made headlines again when it published a report on the threatened downgrade of 15 euro countries. Among other things, Germany must expect the loss of its AAA rating. Experts criticized the rating agency's approach, as the report was already making the rounds among various market participants before S&P officially published it. Individual dealers would have had such an unfair information advantage. Despite the negative outlook for the 15 euro countries at the beginning of December, there was no permanent rise in the price of euro area debt. In January 2012, Standard & Poor's lowered the creditworthiness of nine euro countries, including France and Austria. The two countries were downgraded from the top grade AAA to AA +.
Forecasts are predictions of the future based on data from the past; one of their important methods is extrapolation (see also regression analysis ). Incorrect prognoses are not only possible because of methodological or calculation errors - unforeseeable events can occur (e.g. the nuclear disaster in Fukushima ) that affect economic activity. The rating agencies - like basic economic theories - are accused of not “seeing” major economic crises, such as the ongoing financial crisis of 2007 . Critics complain in particular that the conclusions from mathematical models only reflect those assumptions that were incorporated into the models. Black swans - as a metaphor for the unforeseen - are often not included in the models, according to the financial mathematician and philosopher Nassim Nicholas Taleb .
On January 12, 2012, Ewald Nowotny , head of the Austrian National Bank , criticized the TV broadcaster ORF for saying that Standard & Poor's was “certainly much more aggressive and much more political” than the other rating agencies. "It's a political action if all of Europe is rated down in one fell swoop or at least given a negative perspective."
Fee increase 2012
S&P increased its fees significantly in spring 2012. In April 2012, twelve German corporations - Bayer, Continental, Daimler, Lufthansa, Deutsche Post, E.on, Henkel, Linde, RWE, Siemens, VW and the family company Bertelsmann - protested in an open letter.
Convicted in Australia for misleading reviews
On November 5, 2012, a federal court in Australia sentenced Standard & Poor's together with the major Dutch bank ABN AMRO and the financial services provider LGFS to pay damages amounting to 30 million Australian dollars (around 24 million euros) for misleading reviews of financial products. At the end of 2006, several Australian towns and cities had bought constant proportion debt obligations (CPDO) from ABN Amro for 16 million Australian dollars (approx. 12.8 million euros) with the top rating “AAA”. Despite LGFS's assurance that the risk of loss is less than one percent, the communities that make a living from mining and agriculture lost over 90 percent of their invested capital. The precedent could also lead to trials in Europe and the United States. Standard & Poor's announced that it will appeal the ruling.
Lawsuit filed by the US Department of Justice in February 2013
The US Department of Justice filed a lawsuit against Standard & Poor's in February 2013. Because of the questionable credit ratings for junk bonds from the US real estate crisis, Standard & Poor's has to pay a total of 1.5 billion dollars (the equivalent of 1.32 billion euros). The company announced on February 2, 2015 that it had reached a settlement with the US Department of Justice, 19 states and the capital Washington. The rating agency is now also keen to ensure that it has not admitted any violations of the law. For comparison: The International Monetary Fund (IMF) is assuming total losses of 11.9 trillion US dollars in a calculation from August 2009 . A study by Deutsche Bank Research put the crisis-related reduction in world GDP at four trillion US dollars.
See also
Web links
supporting documents
- ↑ Knowledge: Who do the rating agencies belong to? January 17, 2012, accessed April 23, 2012 .
- ↑ Archived copy ( memento of the original from January 16, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Overview of the locations on the Standard & Poors homepage. (No longer available online.) January 17, 2012, archived from the original on December 25, 2014 ; accessed on June 28, 2016 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ^ Rudolf Hickel: Zerschlagt die Banken , p. 100, Econ Verlag, Berlin 2012, ISBN 978-3-430-20141-4
- ^ Rudolf Hickel: Zerschlagt die Banken, p. 102, Econ Verlag, Berlin 2012, ISBN 978-3-430-20141-4
- ↑ The exchange supervisory authority investigates S&P Handelsblatt , August 14, 2011.
- ↑ "The alleged downgrading of the French credit rating had fueled fears of a worsening of the European debt crisis on Thursday. Shortly thereafter, French government bonds posted the largest losses in value since the introduction of the euro. The news also triggered price losses on the stock markets in the USA and Europe." S&P names computer errors as the reason for rating mismatch , Reuters Germany, November 12, 2011
- ↑ http://www.ftd.de/finanzen/maerkte/anhaben-devisen/:top-rating-aaa-sp-tut-s-schon-wieder/60138714.html ( Memento from December 31, 2011 in the Internet Archive )
- ↑ S&P Downgrades: Austria, France, Italy, Spain and other countries affected ( memento from June 6, 2016 in the Internet Archive ) atwirtschaftsblatt.at, January 13, 2012 (accessed on January 14, 2012).
- ↑ France's Unsolicited Long-Term Ratings Lowered To 'AA +'; Outlook Negative ( Memento of the original from January 19, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. at standardandpoors.com, January 13, 2012 (accessed January 14, 2012).
- ↑ Austria's Long-Term Ratings Lowered To 'AA +'; Outlook Negative ( Memento of the original from January 20, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. at standardandpoors.com, January 13, 2012 (accessed January 14, 2012).
- ↑ "Credit FAQ: Factors Behind Our Rating Actions On Eurozone Sovereign Governments" Standard & Poor's press release January 13, 2012 ( Memento of the original from February 7, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ a b Olaf Storbeck: Fundamental criticism: How the financial crisis turns economics upside down. In: Handelsblatt . January 14, 2010.
- ↑ Nassim Nicholas Taleb: The Black Swan: The Power of Highly Unlikely Events . Ed .: Hanser Wirtschaft . 2008, ISBN 978-3-446-41568-3 . (Original: The Black Swan: The Impact of the Highly Improbable. Penguin, 2008, ISBN 978-0-14-103459-1 )
- ↑ spiegel.de January 13, 2012: Standard & Poor's starts all-round attack against Europe
- ↑ spiegel.de: German corporations are rebelling against rating giants
- ^ Precedent: Standard & Poor's first convicted for misleading ratings by sueddeutsche.de, November 5, 2012 (accessed on November 5, 2012).
- ↑ Standard & Poor's US has to pay billions in fine at ORF Austria on February 3, 2015 (accessed on February 5, 2015).
- ↑ IMF increases cost of financial crisis forecast to $ 11.9 trillion
- ↑ Bernhard Graf and Stefan Schneider: "How threatening are the medium-term inflation risks?" In: Deutsche Bank Research April 30, 2009 (PDF; 301 kB)
