Moody’s Corp. Divides Itself, Creates Non-Ratings Analytics Company

Moody’s Corp., parent of Moody’s Investors Service, announced yesterday that it would bundle several of its non-ratings business lines into a new division called Moody’s Analytics. The announcement came with the appointment of three executives who will lead the restructured company. The re-organization will not affect the day-to-day operations of the groups that rate municipal bond sales and related credits, said Gail Sussman, the managing director in charge of public finance at Moody’s. The most significant change will be that Claire Robinson, the senior managing director in charge of the combined public- and asset-finance businesses, will now report to Noel Kirnon, an executive vice president.The re-organization would have Moody’s Corp. divide itself between the ratings and research business of Moody’s Investors Service and the work of Moody’s Analytics, which comprises divisions such as Moody’s KMV, Moody’s Economy.com, and other businesses outside the rating agency.“Under our new structure, we will achieve better integration across our credit rating business, while reinforcing the separation of the agency from other, increasingly significant, commercial activities of the corporation,” Raymond McDaniel Jr., Moody’s chairman and chief executive officer, said yesterday in a statement.Earlier this year, the Securities and Exchange Commission adopted rules for the registration and regulation of credit rating agencies. The rules dealt with, among other things, preventing conflicts of interest that might arise when agencies issue ratings for a customer that provides the agency with other kinds of business, too.During the first half of 2007, Moody’s Investors Service had $61.4 million of revenue from its public finance rating business, according to an earnings statement the parent company filed with the SEC. Public finance revenue was about 5% of the rating agency’s $1.2 billion of total revenue.The lion’s share of Moody’s revenue came from its structured finance rating business, which generated $524.9 million during the first half — about 44% of the total.Three senior executives have been appointed to lead the newly re-organized company, according to yesterday’s announcement.Brian Clarkson, who previously was Robinson’s direct manager, was named president and chief operating officer of Moody’s Investors Service. He will be responsible for Moody’s rating and research business, the company said in a statement.Christopher Mahoney was named vice chairman of Moody’s Investors Service and will work on a range of corporate initiatives for the company. He previously was an executive vice president and co-COO in charge of the Moody’s global corporate, financial institution, and sovereign ratings.Mark Almeida was appointed senior vice president at the parent company and is responsible for the new Moody’s Analytics division.Other than changing Robinson’s line of reporting, the shifting will not affect the management or rating processes in Moody’s public finance group, according to Sussman.“These are really changes that are happening at a level that’s pretty senior as it relates to public finance and structured finance,” she said.