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Moody’s Seeking to Take Majority Stake in Indian Rater ICRA

Moody’s (MCO) Corp., owner of the second-largest credit-ratings company, is seeking to purchase a majority stake in Indian grader ICRA Ltd. (ICRA), expanding its existing 28.5 percent position.

Moody’s is offering to buy as much as 2.65 million of the New Delhi-based company’s shares for 2,000 Indian rupees ($32.19) each, a 28.7 percent premium to their closing level today on the National Stock Exchange of India, the New York-based firm said in a statement distributed by Business Wire.

The U.S. credit grader, which first purchased a stake in ICRA in 1998, is making the offer on the condition it acquires enough to boost its ownership to more than 50 percent, it said in the statement. McGraw Hill Financial Inc. (MHFI), owner of Standard & Poor’s, the largest ratings firm, said in August it had increased its stake in Indian competitor Crisil Ltd. (CRISIL) to 68 percent from 53 percent after a similar tender offer.

“We look forward to expanding and deepening our collaboration with ICRA as it provides research and ratings for the growing domestic debt market in India as well as other emerging markets in the region,” Moody’s Chief Executive Officer Raymond McDaniel said in the statement.

P.K. Choudhury, chairman and group CEO of ICRA, whose website describes it as an associate of Moody’s, didn’t immediately respond to an e-mail seeking comment.

Full acceptance of the offer from Moody’s, which former journalist John Moody helped start in 1909 by issuing letter grades tied to loans to railroad companies, would result in it owning 55 percent of ICRA, which was created in 1991, according to the statement.

The tender period is expected to begin in April, subject to completion of a review of the transaction by Indian regulators, Moody’s said.

To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net

To contact the editor responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.net

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