Their output over the course of year was impressive, covering asset level analysis, structural insights, transaction parties and legal and governance issues, as well as macroeconomic level research.
“One of the key things we want to do is help answer the questions that investors are thinking about. We have tremendous outreach and we are always asking, ”what are the questions you are trying to answer for a given sector or even on a more macro level,” said Moody’s managing director, Navneet Agarwal. “We marry the questions that we collect from investors with the trends that we are gleaning at transaction, sector, regional and global levels to publish opinionated research.”
There is data to back up this outreach and engagement with the market. In 2019, Moody’s hosted 1,611 meetings, 641 calls and 14 roundtables, pushing out nearly 500 email alerts to the market. According to managing director Jian Hu, accessible, responsive, timely, and deep are some of the adjectives that can be used to describe the team’s high level of engagement.
And if the need for reliable views and information is high in periods of relative calm, times of crisis greatly amplify the importance of the rating agency’s insightful engagement principles. Moody’s has been a leading source of thoughts and opinion as markets deal with the unprecedented events of 2020. Its views are not just one dimensional takes on the situation, either. Moody’s analysts are encouraged to take a position and back it up with data, analysis, cross franchise collaboration, and informed credit opinion.
“Some of our analysis through this crisis uses common building blocks. But we seek to take a view, and what is unique about this crisis is that there is not a lot of performance data available yet. Still, starting in April and definitely by May we had published impact reviews of every single sector and had taken rating actions on many sectors globally,” said Agarwal.
Moody’s securitization researchers have actually increased their engagement in this period, according to managing director Keith Banhazl. The need for timeliness and close contact with market participants is high, as events remain fluid and situations change on an almost daily basis. The rating agency is updating rating drivers on a weekly basis, and has opened its coronavirus web portal for free for anyone in the market who needs their analysis.
“We typically identify research topics in two ways. First, our analysts often identify interesting trends in the[LT1] transactions they review. But a key source is investors and issuers sharing their views on topics that matter to them during roundtables or other outreach calls, “ added managing director Kruti Muni. “As an example, we heard from investors that they are starting to consider ESG factors into their decisions and need information to support that strategies. We organized a roundtable discussion to get more inputs from them. One outcome from this outreach meeting we collaborated with our affiliate, Four Twenty Seven to have their physical climate risk scores for properties in those transactions published in our CMBS pre-sale reports . We also published a report summarizing key points from that discussion.”The research effort at the rating agencies was highly impressive in 2019, and all of the pitches GlobalCapital received were compelling. The competition for this year’s award was stiff, but Moody’s stood out as the most in tune with the needs of the market for engaging, thoughtful and timely analysis. Working to high standards internally, the team produced a truly impressive body of research that touched on a wide range of sector specific and macroeconomic credit factors. It is for these reasons that GlobalCapital is pleased to award Moody’s Investors Service with the award for Rating Agency Research Team of the Year for 2019.