Moody’s Reaches Six-Year High After Refinancing Needs Report
Moody’s Corp. (MCO) climbed to the highest level in more than six years after the owner of the second-largest credit rater released a report forecasting corporate borrowers will have “significant” refinancing needs.
Shares rose 2.5 percent to $70.96 in New York trading, the most since June 2007. Non-financial corporate issuers have “significant refunding needs, especially in 2016 and 2017,” New York-based Moody’s said in a slide presentation posted today on its website.
Demand for ratings services has boosted earnings as companies take advantage of borrowing costs that reached a record low last quarter. Yields on corporate bonds fell to an unprecedented 3.09 percent on May 2, according to the Bank of America Merrill Lynch Global Corporate & High Yield Index. Global issuance of $2 trillion in the first six months exceeded offerings for the corresponding period in 2012, when a record $3.98 trillion was sold for the full year, data compiled by Bloomberg show.
Moody’s, whose founder John Moody helped start the credit ratings business in 1909, reported second-quarter revenue of $537.3 million from grading debt, advancing from $441.2 million in the similar 2012 period, according to data compiled by Bloomberg. Sales from company ratings increased 37 percent to $262.9 million from $191.5 million.
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