Moody’s Corp., owner of the second- largest credit-grader, reported first-quarter profit that beat analysts’ estimates as demand increased for the company’s market research and a junk-loan boom boosted ratings revenue.
The worst financial crisis since the Great Depression is becoming little more than a fading memory for investors in McGraw Hill Financial Inc. and Moody’s Corp., which have risen about three times faster than the broader stock market in the last year.
Warren Buffett , whose Berkshire Hathaway Inc. is the largest shareholder in Moody’s Corp., said the ratings firm’s chief executive officer shouldn’t be singled out for blame over credit grades on mortgage-related assets that proved to be wrong.
Moody’s Corp. Chief Executive Officer Raymond McDaniel said his company’s ratings of collateralized debt obligations and residential mortgage securities in the past several years have been “deeply disappointing.”
Allstate Corp. sued Bank of America Corp. and its Countrywide mortgage unit over $700 million in residential mortgage-backed securities the insurer purchased, claiming Countrywide misrepresented the investments.