Egan-Jones Ratings plans to open an office in Europe to offer European investors a level of impartial analysis unavailable from Standard & Poor's, Moody's Investors Services and Fitch Ratings, according to Sean Egan, managing director. He said Egan-Jones is paid by investors, making it more objective than its issuer-funded competitors
The planned move comes amidst increased criticism of the leading rating agencies which focuses on the accuracy of ratings and the timeliness of ratings changes these firms provide. Egan-Jones already rates about 20 large European companies and the managing director sees a growing need for a local presence as the firm expands its European product.
"It's clear Fannie Mae no longer deserves a triple-A credit rating, yet it hasn't been downgraded by any of the big three ratings firms," said Egan by way of example. He noted Fannie Mae has paid the rating agencies more than $10 million apiece for its rating.
Egan-Jones expects to receive an NRSRO designation in the next six months (BW 12/17).
