MOODY´S Ratings: Performance, Transitions and defaults

About the conference:

Rating agencies play an important role in financial markets. Credit ratings have become the language of credit and help deepen the shared understanding of credit risk. But given the relevance of ratings in financial markets, it is important to consider what ratings are - and what they are not.

In this event, we will discuss the role of ratings in financial markets. We will use our extensive proprietary data, some of which dates back a century, to illustrate how ratings correlate with credit risk, focusing on the crystallization of credit risk: defaults. We will discuss rating performance metrics, rating transitions and current rating distributions across rated entities. We will also analyse triggers of default; in other words, why entities default and how that experience on root causes of default inform our rating methodologies. We will also examine the relation between ratings and alternative signals of credit risk from financial markets, and how ratings correlate with the economic and credit cycles. As ratings are a measure of expected loss, we will also analyse data for recoveries for different levels of subordination.

Finally, we will share Moody's views on the current state of the credit cycle, as well as recent default and rating trends across sectors, regions, and asset classes.