ADVFN - Advanced Financial Network.
HOME» NYSE » M » MCO Stock Price » MCO Stock News

Moodys Share News

 Moodys Corp. Stock Price
MCO Stock Price
 Moodys Corp. Stock Chart
MCO Stock Chart
 Moodys Corp. Stock News
MCO Stock News
 Moodys Corp. Company Information
MCO Company Information
 Moodys Corp. Stock Trades
MCO Stock Trades

Bank CDS Cost Falls as Investors Expect Milder Moody's Cuts

By Katy Burne Some investors are betting on a relief rally in bank bonds, and the credit-default swaps tracking them, with pending rating downgrades from Moody's Investors Service expected to be more benign than previously feared. News reports have suggested that those rating actions from Moody's could occur as early as Thursday. The rating company's review of the banks, announced in February for 17 firms, was expected to be concluded by the end of June at the outset. The cost of insuring the bonds using credit-default swaps has narrowed substantially this month, led by a 18% drop in the cost of five-year CDS protection on Morgan Stanley (MS) bonds since June 1, according to data provider Markit. When CDS protection costs fall, it is likely because more market participants have been selling the insurance-like contracts, effectively betting that the underlying bonds will rise in value. Other banks have benefited from similar improvements, with a 17% drop in five-year CDS costs for Goldman Sachs (GS) debt since June 1, 14% for Bank of America (BAC), 13% for Citigroup (C) and 12% in the case of J.P. Morgan Chase & Co. (JPM). In early May, protection costs soared as investors became nervous about the coming downgrades alongside continuing worries about Europe's debt crisis and the health of the U.S. economy. Since then, Moody's said that a proposed set of rules designed to meet new international bank-capital standards would be a "credit positive" for U.S. banks. Further highlighting the improving sentiment on banks in recent weeks was the gap between the cost of near-term and long-term CDS costs. Normally, five-year CDS costs are much higher than the cost of one-year CDS because investors believe there is more risk of default over a longer period. When the cost of one-year protection rises up to meet five-year CDS, however, as it did with Morgan Stanley last month, that suggests investors are becoming concerned about near-term default risk. The rise in near-term CDS narrows the gap between one- and five-year protection costs, flattening the slope that traditionally exists between premiums of both maturities, while a drop in one-year CDS signals that fears are abating and it steepens that CDS curve. "Initially there were heightened concerns that Morgan Stanley could see as much as a three-notch downgrade," said Otis Casey, director in credit with Markit. "As this concern has subsided somewhat after Moody's indicated that capital requirements would be a credit positive for the banks, the CDS curve became more steep." Mr. Casey said that the initial market reaction from the downgrades would likely depend on the action taken with Morgan Stanley, and whether it is a two- or three-notch downgrade. Write to Katy Burne at katy.burne@dowjones.com

Stock News for Moodys (MCO)
DateTimeHeadline
07/25/201417:59:11Moody's Raises Portugal's Credit Rating -- Update
07/25/201417:31:32Moody's Raises Portugal Credit Rating
07/25/201409:43:08U.S. Hot Stocks: Hot Stocks to Watch
06/26/201416:53:08Peru's Economic Proposals Trigger Environmental Concerns
06/26/201405:19:08Moody's Warns on Australia House Prices
06/23/201406:53:15Moody's: Hungary Court Ruling on FX Loans Credit Could Hurt Banks
06/08/201422:50:40Malaysian Bonds Won't Require Rating From 2017
05/30/201410:25:23Moody's Warns on EU New Banking Rules
04/20/201406:17:33MARKET SNAPSHOT: Long View On Stocks Is Best During Weak Earnings...
02/21/201409:40:08Moody's Offers to Increase Stake in India's ICRA
02/14/201417:53:37Berkshire Reports New Position of 2.95 Million Shares of Liberty...
02/03/201406:42:20Moody's: Turkey's Monetary Tightening Credit Negative for Banks
01/08/201409:10:16ADP Says Private-Sector Jobs Grew in December
01/08/201409:02:17ADP: Private Businesses Add 238K Jobs in December, Above Expectations
11/15/201309:03:11Chilton Investment Co. 3Q 13F: Largest Purchases
11/15/201309:03:09Chilton Investment Co. 3Q 13F: Holdings As Of Sep -2-
11/15/201309:03:09Chilton Investment Co. 3Q 13F: Holdings As Of Sep 30
11/15/201308:50:01Viking Global Investors LP 3Q 13F: Largest Eliminations
11/15/201308:49:57Viking Global Investors LP 3Q 13F: Holdings As Of Sep 30
11/15/201308:22:25Janus Capital Management 3Q 13F: Largest Eliminations

Moodys and other New York Stock Exchange stock quotes are delayed by at least 20 minutes.
All other stock price data is delayed by at least 15 minutes unless otherwise stated.
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
Contact Us | Copyright 1999-2007 ADVFN PLC. | Privacy Policy | Investment Warning | Data accreditations | Investor Relations

ADVFNADVFN ItalyADVFN GermanyADVFN FranceADVFN BrazilADVFN JapanADVFN UKADVFN US noad