After 49 years in public finance, Claire Cohen retires on Dec. 31.
She knew everything about everything, said former Maine Treasurer, Sam Shapiro, of the iconic vice chair and head of the state ratings group at Fitch Ratings.
One of the markets last generalists who was often sighted outside Fitch headquarters on Whitehall Street in lower Manhattan smoking and riffling through pages of The Bond Buyer, Cohen holds wide repute for her formidable knowledge, generosity, and candor.
When she began, Cohen was also one of the first women in the industry.
In 1975, Connecticut Gov. Ella Grasso came to New York to meet with rating agencies at the old Bankers Club on Broadway at a gathering Cohen hosted, recalled Dick Sigal, bond counsel at Hawkins Delafield & Wood LLP.
It was the first time Wall Street was greeted by a woman governor, Sigal said. One came from one end of the room, the other from the other end. It was like two gladiators meeting in the middle of the ring.
But all this was unforeseen, according to Cohen.
After graduating with a government degree from Radcliffe College, Cohen found a job as a proofreader at Dun & Bradstreet, which merged with Moodys in 1961. She said she never expected to return to work after her son, Jim, was born in 1967. But in subsequent years, she carved her own path and philosophy of debt management and affordability, and, some say, singlehandedly established Fitch Ratings as worthy competition to Moodys Investors Service and Standard & Poors.
In 1989, Cohen seized the chance to create something new at Fitch, which had been recently purchased by Russell Fraser. Observers say she lent the start up agency instant credibility at a time when critics accused rating agencies of being too institutional, and of lacking integrity and service.
In those days, we were excited to hear the phone ring, recalled managing director, Amy Doppelt, and one of Fitchs original 15 muni analysts. The public finance group now numbers around 150 and rates 70% of the market and 90% of all states issuing debt, according to group managing director Mike Belsky.
At Fitch, Cohen also returned to her preferred research role, rather than a managerial role. Cohen also had substantially more freedom at Fitch to speak her mind, said longtime colleague, Jeff Baker, vice president at J.P. Morgan Chase.
One of the attractions of going to Fitch was to see if there was any value in your opinion, divorced of the institutional structure, or if your only value was in representing a company, said Cohen, who was a vice president and managing director when she left Moodys. She recalled a former boss reprimand: Did anyone ever ask you for a Cohen rating?
Soon after joining Fitch, Cohen was recognized by New York magazine as among the 100 Smartest New Yorkers for her ability to see the flesh-and-blood community beyond the spreadsheet, in addition to winning industry awards including the first-team All-Star municipal analysts team.
Cohen had a good track record in spotting long term trends in addition to her strengths in analyzing the finance, budgeting, and debt management aspects of a credit, said Hyman Grossman, Cohens former counterpart at Standard & Poors, now retired.
Speaking before legislatures and working with executives and state officials, colleagues from Fitch said Cohen aided the understanding of debt policy and developed realistic debt management policies, which had not really existed before.
Credit ratings are more than fund balances and current finances, Cohen said. For example, California had a surplus of around $5 billion dollars in the 70s. Then voters passed Proposition 13, and it was all gone, she said.
Ive always thought that practices involving debt over the years are more meaningful, she said. A longer look at how much has been borrowed, how it will be repaid, may also reveal whether a municipality has the ability and political will to confront its debt problems, especially those that arent predictable, Cohen added.
This philosophy prompted her to maintain Massachusetts rating in the early 1990s. While Moodys and Standard & Poors downgraded Massachusetts and Cohens detractors will say these actions were more in step with the market Cohen kept Fitchs A rating on the state. Later in 1992, Massachusetts regained its A ratings from the other agencies.
At that time, Cohen defended maintaining the states A rating in The Bond Buyer. Massachusetts problems were short-term and admittedly made more complex by the political situation that was ultimately resolved, she said. Maintaining rating stability might also have sped the states recovery.
During New York Citys crisis in the 70s, Cohen, then at Moodys, had conviction in the strength and processes installed by state and federal constitutions, that the city would ultimately prevail, according to JP Morgans Baker.
I think thats a lesson shes taught us all to take a long-term look at a credit, because we all have our business cycles [and] recessionary cycles, he said.
Cohen, who will remain as a consultant with Fitch, will be succeeded by executive managing director, Richard Raphael. The state ratings team also includes Ruth Corson, Jason Dickerson, Janet Martin, and John Ceffalio.
