S&P Suit Imperials McGraw-Hill Profit Gain
Bloomberg reported that U.S. prosecutors are seeking more than five years’ worth of McGraw-Hill’s profit as punishment for its S&P unit’s inflated grades that contributed to the worst financial crisis since the Great Depression.
Bloomberg said penalties for false representations, concealed facts and manipulated criteria linked to ratings on portions of more than $4 trillion of debt securities could reach $5 billion, more than enough to exhaust McGraw-Hill’s $1.2 billion of cash on hand and the $1.86 billion of excess funds that analysts project the company will generate this year.
Tapping the bond market to fund any shortfall may cost the company $390 million of interest for every $1 billion borrowed over 10 years, Bloomberg notes.
To read the entire Bloomberg story, click here.
Previously on abfjournal.com: