Tags: Meredith | Whitney | Rival | Rating | Agency

FT: Meredith Whitney Plans to Launch Rival Rating Agency

Friday, 19 Nov 2010 12:25 PM

Meredith Whitney, chief executive officer of Meredith Whitney Advisory Group, is setting up a credit ratings firm to compete with Moody’s Investors Service and Standard & Poor’s, the Financial Times reported, citing her in an interview.

Whitney is seeking approval from the Securities and Exchange Commission to become a Nationally Recognized Statistical Rating Organization, since NRSRO status is needed to charge companies for debt risk assessments, the newspaper said.

The venture would then rate structured products, corporate bonds and municipal bonds “with the intention of being a formal competitor to S&P and Moody’s,” Whitney said, according to the London-based newspaper.

Whitney rose to prominence with bearish calls on banks whilst working as an analyst for Oppenheimer Holdings Inc. Moody’s, S&P and Fitch Ratings faced congressional scrutiny for assigning top marks to U.S. subprime mortgage bonds just before that market collapsed in 2007, triggering new regulations aimed at managing potential conflicts of interest which arise when borrowers pay for their own ratings.

A person who answered the phone when Bloomberg News called Meredith Whitney Advisory’s New York office declined to comment. An e-mail seeking comment wasn’t immediately answered.

Whitney would join Jules Kroll, whose former security company’s work included probing the hidden assets of Iraqi dictator Saddam Hussein’s regime, in competing with Moody’s, Fitch and S&P. Kroll Bond Rating Inc. said in August that it bought Lace Financial, gaining a company with NRSRO status and a about dozen employees grading financial institutions.

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Meredith Whitney, chief executive officer of Meredith Whitney Advisory Group, is setting up a credit ratings firm to compete with Moody s Investors Service and Standard Poor s, the Financial Times reported, citing her in an interview. Whitney is seeking approval from the...
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2010-25-19
Friday, 19 Nov 2010 12:25 PM
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