Rating Action
Fitch Ratings affirmed Moody's Corporation's (NYSE:MCO) long‑term issuer default rating at BBB+ and its short‑term IDR and commercial paper ratings at F1 on 11 July 2026. The agency upgraded the outlook from Stable to Positive, highlighting the company's strong market position as a leading global credit rating agency, its increased overall scale, sustained and expanding free cash flow, and consistent financial policies.
Financial Profile
Moody's closed 2025 with an EBITDA leverage ratio of 1.7x and held more than $2 billion in cash on its balance sheet. The firm also maintains an undrawn revolver and a $1 billion commercial paper program. Its business model is described as highly profitable and cash‑generative, benefiting from low capital intensity and strong operating leverage. Diversification beyond traditional ratings is evident, with Moody's Analytics now delivering over 40% of total revenue, providing substantial recurring revenue that underpins the credit profile.
Outlook Assumptions and Future Expectations
Fitch's assumptions project 2026 results in line with management expectations, with revenue growth in 2027 and beyond tapering to lower‑single‑digit percentages. The agency expects EBITDA margins to stay above 50% and leverage to remain below 2.0x in future years. Fitch indicated that the ratings could be upgraded further if Moody's continues to grow while maintaining its margin and free‑cash‑flow profile. The firm also anticipates that Moody's will keep returning significant capital to shareholders through dividends and share repurchases, while maintaining relatively stable credit metrics.
Additional Notes
The article was generated with AI assistance and reviewed by an editor, as noted in the source disclaimer.