Survey Finds Mixed Sentiment for Credit Rating Agencies
Six out of 10 European issuers of rated securities agree that credit ratings firms have suffered due to the global financial crisis, although 59% of respondents scored Standard & Poor’s (S&P) overall product and service quality as ‘excellent’ or ‘very good’, with a further 28% scoring it as ‘good’. These results are comparable to a 2007 survey, where S&P scored 60% and 29% respectively.
The survey of European issuers – including corporates, governments, financial institutions and issuers within the insurance, infrastructure and public finance sectors – affirmed that issuers believe the reputation of all the major ratings providers has been negatively impacted by the financial crisis. But it also suggested that issuers’ retain a high opinion of the services provided by ratings firms.
The survey was commissioned by S&P and undertaken by an independent third-party research company in April 2009. It drew responses from 410 issuers located in 47 countries across Europe, the Middle East and Africa (EMEA).
“By any benchmark, 2008 was a turbulent year for the credit markets and ratings firms, like other market participants, have been the subject of intense scrutiny,” said Martin Winn, head of communications, EMEA, at S&P. “Yet this survey provides some perspective – especially as it is undertaken annually with the objective of improving S&P’s overall services.”
The issue of reputation for ratings providers is still seen as vital, with more than four-fifths of issuers agreeing that reputation is ‘very important’ for ratings firms. Interestingly, only 24% apply the same significance to cost. The three factors mentioned most often as being important in evaluating ratings providers are ‘overall knowledge of the industry’, ‘transparency’ and ‘quality of analysis’.
More than 80% of respondents still value the S&P brand highly and associate it with trust. The word most commonly associated with S&P is ‘professional’, with ‘quality’ also receiving significant mention.