Reuters reported banks are continuing to issue highly leveraged loans in the wake of loosening rules this year, despite regulator warnings of credit market frothiness.
The Securities and Exchange Commission announced Moody’s Investors Service agreed to pay a total of $16.25 million in penalties to settle charges involving internal control failures and failing to clearly define and consistently apply credit rating symbols. This marks the first time the SEC has filed an enforcement action involving rating symbol deficiencies.
The Wall Street Journal reported that Moody’s has predicted increased demand for floating-rate leveraged loans has eroded credit quality and will lead to more defaults and lower recovery rates in an economic downturn.
A new Experian/Moody’s Q1 report on the financial health of the small-business community shows credit lines are expanding, but utilization rates are down 17% from the previous year.
According to Moody’s, FASB’s much-anticipated new lease accounting standard requiring the recognition of operating leases on the balance sheet will increase reported debt by roughly $1 trillion.
Moody’s has invested in Finagraph, a provider of automated financial data collection and business intelligence solutions.
Moody’s reports financial fundamentals will stabilize in most European banking systems in 2016 due to tighter regulation, stronger capitalization and a modest pick-up in private sector credit demand.
Moody’s Investors Service affirmed the B2 corporate family and senior secured ratings of NXT Capital and revised its rating outlook to positive from stable.