Moody’s Corporation is an American business and financial services institution that plays a critical role in global capital markets. Its origin traces back to 1900 when founder John Moody published his first market assessment, Moody's Manual of Industrial and Miscellaneous Securities. The company was formally founded in 1909 to produce bond ratings, solving the problem of providing a "simple system of gradation" to help investors gauge the future relative creditworthiness of securities. The corporation is structured into two main divisions: Moody's Ratings (the credit rating agency) and Moody's (formerly Moody's Analytics), which provides financial analysis software and services.
Moody's Ratings assigns credit ratings, which are forward-looking opinions on the relative credit risk of debt obligations, including government, municipal, and corporate bonds. The ratings measure the expected investor loss in the event of default. The core mechanism uses a standardized scale, where Aaa represents the highest quality and lowest credit risk, and C is the lowest quality. These ratings are determined by a rating committee process that applies published methodologies and considers both quantitative and qualitative factors. Moody's is one of the Big Three credit rating agencies, connecting it directly to competitors like Standard & Poor's and Fitch Group. A significant recent change is the rebranding of the credit rating division from Moody's Investors Service to Moody's Ratings on March 6, 2024.