December 2, 2009
The following is a post from the Motley Fool Editor's blog. You can see all the posts by clicking here.
Morningstar (Nasdaq: MORN ) announced today that it's getting into the credit rating business.
Morningstar's 100+ equity analysts already cover more than 2,000 companies. Now, in addition to their normal analysis and research, Morningstar analysts will be taking the next step and providing credit ratings. They'll start slowly at first with just 100 companies, eventually growing to 1,000.
It's not a huge logical leap to see Morningstar going after the big three credit rating agencies -- Moody's (NYSE: MCO ) , S&P (a division of McGraw-Hill (NYSE: MHP ) ), and Fitch -- in earnest (e.g. rating mortgage-backed securities, municipal bonds, etc.). The big three have a virtual monopoly on credit ratings in the U.S. because the Securities and Exchange Commission allows their ratings to be used for regulatory compliance purposes. But with all the blame and bad press the credit ratings agencies have been getting, now seems a great time for Morningstar to wedge its foot in the door.
Great move, Morningstar.
Anyone disagree? Let me know in the comments section below.