OREANDA-NEWS. S&P Global Ratings said today that it assigned its 'A-2' short-term corporate credit rating to New York City-based Moody's Corp. The 'BBB+' long-term corporate credit rating and stable rating outlook on the company are unchanged.

In addition, we assigned our 'A-2' commercial paper (CP) rating to Moody's proposed up to $1 billion 4(a)(2) CP program.

"The 'A-2' short-term and CP ratings reflect our 'BBB+' long-term corporate credit rating on Moody's and the company's exceptional liquidity," said S&P Global Ratings' credit analyst Naveen Sarma. The proposed CP program are unconditionally guaranteed by Moody's and backed by the $1 billion revolving credit facilities. The terms of the credit facilities align with our CP criteria and include the company's ability to make same-day drawings and diverse bank group participation.

"The 'BBB+' corporate credit rating, which incorporates our satisfactory business risk profile assessment, reflects the Moody's scale as a global provider of credit ratings and its well-known global brand," said Mr. Sarma. We believe these factors will continue to support Moody's ability to maintain its solid market position as one of the leading global credit ratings agencies. We see the potential for increased risk over the next two to three years, stemming primarily from the U. S. Department of Justice's (DOJ's) lawsuit against S&P Global Ratings and the subsequent settlement in February 2015. Although Moody's wasn't named in this or any similar lawsuit, we believe that the DOJ's action has elevated the legal risks credit ratings agencies face in general. Our corporate credit rating on Moody's doesn't incorporate any substantial legal penalties, though we believe regulatory risk will continue to rise as regulatory agencies around the world increase their rigor and oversight of the credit ratings business.

The stable rating outlook reflects Moody's healthy business fundamentals, the potential for increased legal and regulatory risks, and our expectation that the company's adjusted leverage will remain below 1.5x through 2017.

We could raise our corporate credit rating on Moody's over the next three years if we become convinced that legal and regulatory risks will not materially increase or alter the company's business model, and that management will maintain the company's existing financial policy, which supports its current credit measures.

Moody's maintains what we view as a moderate financial policy with respect to share repurchases, dividends, and acquisitions. We could lower the rating if Moody's adopts a more aggressive financial policy that, in our view, will likely increase and sustain its adjusted debt leverage above 1.5x. Alternatively, an unfavorable shift in regulatory conditions or legal risk could result in a downgrade. We don't regard either of these downgrade scenarios as likely at this time.