Moody's refers to Moody's Ratings, a global credit rating agency and a division of Moody's Corporation. It is one of the "Big Three" credit rating agencies, alongside Standard & Poor's and Fitch Group.
The institution's history traces back to 1900, when John Moody published his first market assessment, Moody's Manual of Industrial and Miscellaneous Securities. The problem it solved was the lack of independent and transparent financial information for investors, providing detailed statistics on stocks and bonds. The current company was founded in 1909, and Moody's Investors Service was incorporated in 1914 to assess the relative risk of bonds from companies and governments. The ratings system was developed to help investors assess credit risk and was later used in the 1936 laws that prohibited banks from investing in "speculative investment securities" as determined by recognized rating manuals.
Moody's works by assigning a standardized letter-grade rating to debt securities, ranging from Aaa (highest quality) to C (lowest quality), which measures the expected investor loss in the event of default. For India, Moody's Ratings currently holds a long-term local and foreign-currency issuer rating of Baa3 with a stable outlook. This rating reflects the agency's confidence in India's resilient growth prospects and improving fiscal metrics.
Moody's is closely connected to the global capital markets and the Indian economy, where it publishes reports on corporate credit quality and economic forecasts. Its Indian affiliate is ICRA Limited. A recent change occurred on March 6, 2024, when Moody's Investors Service was rebranded and renamed to Moody's Ratings. The core function of providing credit ratings and research remains the same.