Kroll_Ratings_Takes_Aim_at_S_P_Fitch_And_Moody_s - JANUARY...

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JANUARY 20, 2011 Kroll Ratings Takes Aim at S&P, Fitch And Moody's By KATY BURNE Two years after the financial crisis shattered investors' faith in the Big Three credit rating firms, a new competitor entered the market Wednesday, promising a more forensic approach to assessing the risk of mortgage-backed securities and other structured-finance transactions. Jules Kroll created the newcomer, Kroll Bond Ratings Agency Inc., after selling his eponymous corporate investigations firm to insurance broker Marsh & McLennan in 2004. Mr. Kroll's new firm has provided financial strength ratings to banks and credit unions, among others, through a boutique ratings company, LACE Financial, that it acquired last August. Wednesday marks its first effort to rate individual securities through Kroll Bond Ratings. To provide the "deep dive" investors want on ratings, the company said it will look beyond the information that issuers provide and will make regular use of corporate consulting and security firm K2 Global, a separate company run by Mr. Kroll's son Jeremy, 39 years old. "The incumbents avoid doing due diligence," Mr. Kroll, 69, said in an interview Tuesday, referring to the three better-known rivals: Standard & Poor's, a unit of McGraw Hill Cos .; Moody's Inc.'s Moody's Investors Service; and Fitch Ratings, a subsidiary of Fimalac SA of France. Even now, ratings firms have been criticized by certain investors who see their ratings as
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This note was uploaded on 03/18/2011 for the course FIN 615 taught by Professor Yan during the Spring '11 term at New York Institute of Technology-Westbury.

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Kroll_Ratings_Takes_Aim_at_S_P_Fitch_And_Moody_s - JANUARY...

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