Fitch Ratings Inc. is an American
credit rating agency. It is one of the three
nationally recognized statistical rating organizations (NRSRO) designated by the
U.S. Securities and Exchange Commission and is considered as being one of the "
Big Three credit rating agencies", along with
Moody's and
Standard & Poor's
S&P Global Ratings (previously Standard & Poor's and informally known as S&P) is an American credit rating agency (CRA) and a division of S&P Global that publishes financial research and analysis on stocks, bonds, and commodities. S&P is co ...
.
History
Fitch Ratings is dual headquartered in
New York and
London
London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...
.
Hearst owns 100 percent of the company following its acquisition of an additional 20 percent for $2.8 billion on April 12, 2018.
Hearst had owned 80 percent of the company after increasing its ownership stake by 30 percent on December 12, 2014, in a transaction valued at $1.965 billion. Hearst's previous
equity interest was 80 percent following expansions on an original acquisition of 20 percent interest in 2006.
Hearst had jointly owned Fitch with
FIMALAC SA, which held 20 percent of the company until the 2018 transaction. Fitch Ratings and Fitch Solutions are part of the Fitch Group.
The firm was founded by
John Knowles Fitch on December 24, 1914, in
New York City
New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...
as the Fitch Publishing Company. In 1989, the company was acquired by a group including
Robert Van Kampen. In 1997, Fitch was acquired by
FIMALAC and was merged with London-based IBCA Limited, a FIMALAC subsidiary. In 2000, Fitch acquired both Chicago-based
Duff & Phelps Credit Rating Co. (April) and
Thomson Financial BankWatch (December).
Fitch Ratings is the third largest
NRSRO rating agency, covering a more limited share of the market than S&P and Moody's, though it has grown with acquisitions and frequently positions itself as a "tie-breaker" when the other two agencies have ratings similar, but not equal, in scale.
In September 2011, Fitch Group announced the sale of
Algorithmics (risk analytics software) to
IBM
International Business Machines Corporation (using the trademark IBM), nicknamed Big Blue, is an American Multinational corporation, multinational technology company headquartered in Armonk, New York, and present in over 175 countries. It is ...
for $387 million.
In June 2022, Fitch Group acquired
GeoQuant, an
AI-driven data and technology company.
Operations
Fitch Ratings is a subsidiary of Fitch Group, a holding company wholly owned by
Hearst Communications.
Fitch Group also operates Fitch Solutions, a distribution channel for Fitch Ratings products and a provider of credit market data and financial analytics.
Fitch Group employs approximately 5,000 people, including over 1,600 analysts.
Paul Taylor is president and chief executive officer of Fitch Group.
Fitch Ratings is registered as a nationally recognized statistical rating organization (NRSRO).
The firm has more than 2,400 employees.
Ian Linnell is president of Fitch Ratings.
Criticism
The main
credit rating agencies, including Fitch, were accused of misrepresenting the risks associated with mortgage-related securities, which included the
collateralized debt obligation
A collateralized debt obligation (CDO) is a type of structured finance, structured asset-backed security (ABS). Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing Mortgage-backed se ...
(CDO) market. There were large losses in the CDO market that occurred despite being assigned top ratings by the CRAs.
For instance, losses on $340.7 million worth of collateralized debt obligations (CDO) issued by
Credit Suisse Group added up to about $125 million, despite being rated AAA by Fitch.
However, differently from the other agencies, Fitch was warning the market on the
constant proportion debt obligations (CPDO) with an early and pre-crisis report highlighting the dangers of CPDOs in 2007.
See also
*
FIMALAC
* Kroll Bond Rating Agency
*
List of countries by credit rating
*
Moody's Investors Service
*
Spread Research
*
Standard and Poor's
References
External links
*
Fitch SolutionsFitch Learning
{{Authority control
Credit rating agencies
Financial services companies established in 1914
Financial services companies of the United States
Companies based in New York City
Financial services companies based in New York City
1914 establishments in New York City