General Information & Client Services
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518

Refine your results

Article

Weekly Market Outlook: Borrowing Restraint Elsewhere Makes Room for Federal Debt Surge

Partly as a means of offsetting the loss of business activity to deleveraging by households, businesses, as well as state and local governments, the federal government's share of the U.S.' broadest estimate of public and private nonfinancial-sector debt has soared from year-end 2007's 18% to the 34% of 2017's third quarter. The latter share is the highest since 1960's third quarter.

February 2018 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Ryan Sweet, Barbara Teixeira Araujo, Reka Sulyok, Katrina Ell, Faraz Syed
Article

Weekly Market Outlook: Declining Default Rate Offsets Drag of Higher Interest Rates

Corporate bond yield spreads have been relatively steady throughout recent equity market tumult. Expectations of a declining high-yield default rate into early 2019 have anchored corporate yield spreads.

February 2018 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Ryan Sweet, Barbara Teixeira Araujo, Reka Sulyok, Katrina Ell
Interview

Regulatory Constraints: How Increased Requirements Are Evolving CPM

Amnon Levy, managing director and head of portfolio and balance sheet research at Moody's Analytics, discusses the evolving expectations of institutions for credit portfolio management, as well as how it is being altered and adapted amid greater impact from new regulatory and technological advancements.

February 2018 Pdf Dr. Amnon Levy
Article

Weekly Market Outlook: Corporate Bonds Beg to Differ With Their Equity Brethren

Thus far, the corporate credit market has been relatively steady amid equity market turmoil. Corporate credit's comparative calm stems from expectations of continued profit growth that underpins a still likely slide by the high-yield default rate. The record shows that 90% of the year-to-year declines by the default rate were joined by year-to-year growth for the market value of U.S. common stock.

February 2018 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Ryan Sweet, Barbara Teixeira Araujo, Reka Sulyok, Katrina Ell, Faraz Syed
Article

Weekly Market Outlook: Higher Yields and Lower Equities Might Yet Swell Credit Risk

It has been a volatile week for financial markets. After shrugging off an earlier ascent by the 10-year Treasury yield from year-end 2017's 2.41% to January 26's 2.66% and advancing by 7.1%, the market value of U.S. common stock has since sunk by 1.6% in reaction to a climb by the 10-year Treasury yield to 2.77%. The deeper post-January 26 drop of 3.7% by the interest-sensitive PHLX index of housing-sector share prices underscores the importance of higher Treasury bond yields to the latest retreat by equities. Earlier, or from year-end 2017 through January 26, the index of housing sector share prices was up by 4.9%, which trailed the accompanying advance by the overall equity market.

February 2018 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Ryan Sweet, Barbara Teixeira Araujo, Anna Zabrodzka, Katrina Ell
Article

Weekly Market Outlook: High-Yield Bond Issuance Thrives Despite Tax Law Changes

Some predicted that the loss of the full deductibility of business interest expense would weigh heavily on the issuance of dollar-denominated high-yield bonds. However, corporate bond issuance has exceeded expectations thus far in 2018.

January 2018 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Ryan Sweet, Barbara Teixeira Araujo, Reka Sulyok, Faraz Syed, Katrina Ell
Article

Dynamic Model-Building: A Proposed Variable Selection Algorithm

In this article, we propose an innovative algorithm that is well suited to building dynamic models for credit and market risk metrics, consistent with regulatory requirements around stress testing, forecasting, and IFRS 9.

Article

Weekly Market Outlook: Surging Equities and Thinner Spreads Favor Higher Treasury Yields

Earnings-sensitive securities have thrived thus far in 2018. Not only was the market value of U.S. common stock recently up by 4.5% since year-end 2017, but a composite high-yield bond spread narrowed by 23 basis points to 336 bp. The latter brings attention to how the accompanying composite speculative-grade bond yield fell from year-end 2017's 5.82% to a recent 5.72% despite the 5-year Treasury yield's increase from 2.21% to 2.39%, respectively.

January 2018 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Ryan Sweet, Barbara Teixeira Araujo, Alaistair Chan, Katrina Ell
Article

Weekly Market Outlook: Stocks and Spreads May Transcend Higher Treasury Yields

Markets now focus on early 2018's climb by Treasury bond yields to heights last observed in March 2017. Though the 10-year U.S. Treasury yield climbed from year-end 2017's 2.41% to a recent 2.55%, the latter resembles the 2.6% average predicted for 2018's first quarter by the Blue Chip Financial consensus of late December 2017. Moreover, the 10-year Treasury yield still lags its 2.74% average of the six-monthsended March 2014 that coincided with the taper tantrum.

January 2018 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Kathryn Asher, Reka Sulyok, Alaistair Chan, Katrina Ell
Article

Weekly Market Outlook: Profits Growth and Benign Default Outlook May Offset Higher Interest Rates

Corporate bonds and equities got out of the gate quickly in 2018. Though benchmark interest rates are likely to climb higher, the combination of corporate earnings growth and a benign outlook for corporate defaults should be enough to prevent a deep and extended slide by share prices. Except for late 1987's stock market crash, the historical record shows that since 1982, interest-rate inspired declines by the broad equity indices have been relatively brief and shallow.

January 2018 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Ryan Sweet, Suzanne Schatz, Reka Sulyok, Katrina Ell
Webinar-on-Demand

Ag Renewals in 2018 – Preparing for the Challenges Ahead

Agriculture renewals in 2018 are presenting some major concerns for banks and producers alike. Moody's Analytics is hosting a special, client only webinar to help prepare for the upcoming renewal season.

December 2017 WebPage Doug Johnson
Article

Weekly Market Outlook: Benign Credit Outlook Comes With Blemishes

No forecast is free of downside risks. In a manner that is consistent with (1) the recent increase in the incidence of high-yield credit rating downgrades relative to upgrades and (2) a roughly unchanged reading for the average high-yield EDF (expected default frequency) metric since the EDF's month-long average last bottomed in February 2017, Moody's Default Research Group upwardly revised its projected U.S. high-yield default rates for each of the 11 months ended October 2018 by 24 basis points (bp), on average. For example, the projected average default rate for 2018's third quarter was raised from the 2.14% of the November 2017 forecast to 2.40% as of December's projection.

December 2017 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Kristopher Cramer, Barbara Teixeira Araujo, Katrina Ell, Faraz Syed
Whitepaper

Maximize Efficiency: How Automation Can Improve Your Loan Origination Process

In this paper, we outline the challenges of traditional lending practices and examine each stage of the credit process to see how automation can improve and standardize underwriting procedures.

December 2017 Pdf Doug Peterson
Whitepaper

Redefining Loan Monitoring and Early Warning Signal Detection Through an Integrated Solution

In this paper, we explore what monitoring lenders routinely undertake, why it is so difficult and what new technology tools are at their disposal to improve the process, and show how better monitoring can lead to better risk management and lower portfolio losses.

December 2017 Pdf Hichem Kerma
Article

Weekly Market Outlook: Dangers Lurk Amid 2018's Positive Outlook

Earnings-sensitive markets thrived in 2017. Though late 2016's outlook for 2017's pretax operating profits proved to be fairly accurate, the market value of U.S. common stock still soared higher by 18% to a new record high. Several developments explained why the market value of common equity outran the growth of core profits in 2017. First, the market strongly believes in the efficacy of forthcoming tax law changes and has effectively shrugged off whatever harmful effects may arise from a wider federal budget deficit. Moreover, a recent study from Moody's Investors Service concludes that while most US companies will be better off following the enactment of corporate tax reform, at least a quarter of highly-leveraged companies will be worse off.

December 2017 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Tomas Holinka , Barbara Teixeira Araujo, Katrina Ell, Faraz Syed
Article

Weekly Market Outlook: High-Yield Borrowing May Slow Following 2017's Boom

A fundamentally excessive climb by interest rates is one of the bigger threats to 2018's positive outlook. Lately, financial asset prices have been advancing in response to the expectation that 2018's widely anticipated rise by benchmark borrowing costs will be manageable. In all likelihood, a Powell Fed will avoid taking preemptive action against a hypothetical jump in inflation risks unless the Treasury bond and foreign exchange markets demand otherwise. For now, the latest flattening of the Treasury yield curve reflects increased confidence in the long-term containment of inflation expectations.

December 2017 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Tomas Holinka , Barbara Teixeira Araujo, Katrina Ell, Faraz Syed
Article

The Data Revolution: Gaining Insight from Big and Small Data

In this article, we explore the importance of small data in risk modeling and other applications and explain how the analysis of small data can help make big data analytics more useful.

December 2017 WebPage Dr. Tony Hughes
Article

Weekly Market Outlook: 2018 Outlooks for Defaults and Profits Imply Ample Liquidity

Sometimes analysts cry wolf and nothing worse than a barking Chihuahua appears. And so it was with the Great Junk Bond Scare of November 9 through 17. Liquidity effectively shrugged off the high-yield bond market's sell-off of mid-November. When credit is in real trouble, high-yield funding quickly dries up. which simply didn't happen during the high-yield market's latest correction.

November 2017 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Tomas Holinka , Barbara Teixeira Araujo, Katrina Ell, Faraz Syed
Article

Weekly Market Outlook: Fewer Defaults Will Stave Off Much Wider Spreads

The high-yield bond market recently incurred a jarring sell-off. On October 24, the composite speculative-grade bond yield and its spread over Treasuries bottomed at 5.46% and 340 bp, respectively. By November 15, the spec-grade yield had jumped up to 6.13%, while the spread swelled to 407 bp. Nevertheless, the latest widening of high-yield bond spreads more likely stems from a correction of under-compensation for default risk rather than from a deterioration of corporate credit quality.

November 2017 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Tomas Holinka , Barbara Teixeira Araujo, Katrina Ell
Article

Weekly Market Outlook: Fewer Defaults Favor Even Pricier Equities

The benign outlook for high-yield defaults now supports the US equity market. Moody's Default Research Group recently projected a decline by the US high-yield default rate from October 2017's 3.2% to 2.1% by October 2018.

November 2017 Pdf John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi, Tomas Holinka , Barbara Teixeira Araujo, Katrina Ell, Veasna Kong
Article

Weekly Market Outlook: Slower Labor Costs and Pricier Metals Help Stocks Soar

To the benefit of credit quality, the world economy is humming. However, the pace of global expansion has yet to significantly boost inflation expectations or the real return demanded from credit market instruments. Thus, benchmark government bond yields remain low. For 10-year sovereign government bond yields, the US Treasury's recent 2.35% was well above Japan's 0.04%, Germany's 0.37%, the UK's 1.26%, and Canada's 1.95%.

November 2017 Pdf Franklin Kim, Njundu Sanneh, Yukyung Choi, Tomas Holinka , John Lonski, Barbara Teixeira Araujo, Katrina Ell, Veasna Kong
Article

The Impact of CECL's Financial Reporting Requirements

FASB's new accounting standard will have a significant effect on financial statements. Financial institutions must educate their investors and shareholders about how CECL-driven disclosure and reporting changes could potentially alter the bottom line.

November 2017 Pdf Masha Muzyka
Whitepaper

Five Indispensable Insights For The Evaluation of a Commercial Credit Origination System

In this paper Moody's Analytics draw on more than a decade of experience with credit origination solution implementations, with banks of varying sizes, complexity, and geography. To share observations of five key steps that financial institutions must consider when evaluating a credit origination solution.

November 2017 Pdf Zuraidah Zaid
Webinar-on-Demand

CECL: for Community Banks – Are You Prepared?

Join Moody's Analytics for an informative webinar discussing FASB's new Current Expected Credit Loss (CECL) standard and what you can be doing now to prepare.

November 2017 WebPage Eric Snyder
Article

Project Finance: The Potential Returns

Effective risk assessment approaches to project finance must reflect a true understanding of complex issues. These assessments include the macroeconomic context, which provides an early indication of the potential risks and returns of infrastructure investments.

October 2017 Pdf Dr. Jing Zhang, Kevin Kelhoffer, Jorge A. Chan-Lau
Article

Weekly Market Outlook: Higher Bond Yields Could Depress Share Prices

Any analysis regarding the appropriate valuation of a long-lived asset must account for the influence of interest rates. All else the same, a rise by the interest rates of lower-risk debt obligations, namely US Treasury debt, will reduce the prices of other financial and real assets. Whenever asset prices defy higher interest rates and rise, a worrisome overvaluation of asset prices may be unfolding. Today's high priceto- earnings multiples of equities and narrow yield spreads of corporate bonds have increased the vulnerability of financial asset prices to a widely anticipated climb by short- and long-term Treasury yields.

October 2017 Pdf Franklin Kim, Njundu Sanneh, Yukyung Choi, Tomas Holinka , John Lonski, Barbara Teixeira Araujo, Katrina Ell
Webinar-on-Demand

Leveraging Technology to Transform Commercial Credit Origination — Build Versus Buy

In this webinar, David Ratnage, Senior Director, Credit Assessment & Origination at Moody's Analytics addresses some of the key areas of debate when banks consider the buy versus build approach when investing in commercial lending platforms.

October 2017 WebPage David Ratnage
Article

Weekly Market Outlook: So Much Debt, So Little Growth

Today marks the 30th anniversary of the stock market crash of 1987. October 19, 1987's -17.9% daily plunge by the market value of US common stock included a -20.5% plummet by the S&P 500. To better grasp what transpired, consider that a -20% dive by today's Dow Jones Industrial Average would sink the blue-chip average by roughly 4,600 points to something under 20,000 points. Moreover, a -17.9% collapse would slash the market value of common equity by -$4.75 trillion, which approximates 25% of Q2-2017's nominal GDP.

October 2017 Pdf Franklin Kim, Njundu Sanneh, Yukyung Choi, Tomas Holinka , John Lonski, Barbara Teixeira Araujo, Katrina Ell, Faraz Syed
Article

Modeling and Forecasting Interest Rate Swap Spreads

In this article, we model and forecast the term structure of swap spreads across a range of currencies using a principle component decomposition.

Article

Stressed Realized LGDs: Forecasting Recovery Rates under Alternative Macroeconomic Scenarios

This article proposes a method of modeling realized losses given default (LGDs) as a function of macroeconomic drivers for stress testing purposes.

RESULTS 1 - 30 OF 347