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Finance: What are the Differences in S&P's and Moody's Ratings? 27 Views

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Description:

What are the differences in S&P’s and Moody’s ratings? Both S&P and Moody’s give ratings that help investors determine if they are making smart investments, but they do look at the investments a bit differently to determine ratings. S&P considers how likely the debt issuer is to default on payments to investors, while Moody’s looks at how much will be lost upon a default. They also look a little different; Moody’s uses a combination of letters and numbers, while S&P uses letters and symbols (report card style); in both cases, A is good, D is bad.

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Transcript

00:00
finance a la shmoop what are the differences in S&P's, and Moody's
00:07
ratings? capital letters. really that's about it the assessment of the rating
00:12
itself is about the same. the people work at both companies all came from about [grinning men walk in front of a school]
00:16
the same schools the same semi diversified backgrounds and well they
00:20
all eat the same white bread. note the nomenclature differences here though.

00:24
Moody's does in fact look kind of moody with a big fat capital letter in the
00:29
beginning followed by small letters and slightly different notations. the S&P is
00:33
all in caps all shouting all the time. the metrics behind say a quote highly [chart shown]
00:38
speculative bond unquote down here are about the same for both companies but
00:44
the slight differences are worth noting so that when you see a rating well you
00:48
know just by the way in which it's written who wrote it.
00:51
now as for actually understanding bond ratings well that's a different story. to [document shown]
00:55
most people they might as well be hieroglyphics. [confused woman reads paper]
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