View source for S&P Global Ratings

{{short description|American credit rating agency}}
{{redirect|S&P|the broadcasting entity|Broadcast Standards and Practices}}
{{Use mdy dates|date=July 2011}}
{{Infobox company
| name = S&P Global Ratings
| logo = S&P Global Ratings Logo.svg
| logo_size = 220px
| type = [[Subsidiary]]
| industry = [[Financial services]]
| founder = [[Henry Varnum Poor]]
| area_served = 
| key_people = John Berisford
| products = 
| services = 
| revenue = {{profit}}US$2.61&nbsp;billion (2009)<ref>{{cite web |url=http://www.standardandpoors.com/about-sp/key-statistics/en/us |title=S&P &#124; About S&P &#124; Americas – Key Statistics |publisher=Standard & Poor's |access-date=August 7, 2011 |url-status=live |archive-url=https://web.archive.org/web/20110816010118/http://www.standardandpoors.com/about-sp/key-statistics/en/us |archive-date=August 16, 2011 |df=mdy-all }}</ref>
| operating_income = 
| net_income = 
| owner = 
| num_employees = 10,000+
| parent = [[S&P Global]]
| divisions = 
| subsid = 
| footnotes = 
| foundation = {{Start date and age|1860}}<br>{{start date and age|1941}} (present corporation status)
| location_city = [[New York City]], [[New York state|New York]]
| location_country = U.S.
| predecessor = {{Unbulleted list | Poor's Publishing | Standard Statistics}}|
| slogan = 
| homepage = {{url|https://spglobal.com/ratings/}}
}}

'''S&P Global Ratings''' (previously '''Standard & Poor's''' and informally known as '''S&P''') is an American [[credit rating agency]] (CRA) and a division of [[S&P Global]] that publishes financial research and analysis on [[capital stock|stock]]s, [[Bond (finance)|bonds]], and [[commodity|commodities]]. S&P is considered the largest of the [[Big Three (credit rating agencies)|Big Three]] credit-rating agencies, which also include [[Moody's Ratings]] and [[Fitch Ratings]].<ref>{{cite web |author= Blumenthal, Richard |url= http://www.juneauempire.com/stories/050509/opi_436594375.shtml |title= Three Credit Rating Agencies Hold Too Much of the Power |publisher= Juneau Empire – Alaska's Capital City Online Newspaper |date= May 5, 2009 |access-date= August 7, 2011 |url-status= dead |archive-url= https://web.archive.org/web/20111101123455/http://juneauempire.com/stories/050509/opi_436594375.shtml |archive-date= November 1, 2011 |df= mdy-all }}</ref> Its head office is located on [[55 Water Street]] in [[Lower Manhattan]], [[New York City]].<ref>{{cite web
 |url         = http://ratings.standardandpoors.com/about/get-in-touch
 |publisher   = Standard & Poor's
 |date        = July 3, 2013
 |title       = Corporate 55 Water Street New York New York
 |url-status     = live
 |archive-url  = https://web.archive.org/web/20130628034934/http://ratings.standardandpoors.com/about/get-in-touch
 |archive-date = June 28, 2013
 |df          = mdy-all
}}</ref>

==Corporate history==
[[File:Poor's Directory of Railroad Officials 1893 (Frontispiece).jpg|thumb|right|''Poor's Directory of Railroad Officials'', 1893 (frontispiece)]]

The company traces its history back to 1860, with the publication by [[Henry Varnum Poor]] of ''History of Railroads and Canals in the United States''. This book compiled comprehensive information about the financial and operational state of U.S. railroad companies. In 1868, Henry Varnum Poor established '''H.V. and H.W. Poor Co.''' with his son, [[Henry William Poor]], and published two annually updated hardback guidebooks, ''[[Poor's Manual of the Railroads of the United States]]'' and ''Poor's Directory of Railway Officials''.<ref name="snphistory"/><ref name=time-history>{{cite news
 |title       = Corporations: Standard & Unpoor
 |url         = http://www.time.com/time/magazine/article/0,9171,939281,00.html
 |access-date  = October 19, 2011
 |newspaper   = Time magazine
 |date        = October 13, 1961
 |url-status     = dead
 |archive-url  = https://web.archive.org/web/20111220063352/http://www.time.com/time/magazine/article/0,9171,939281,00.html
 |archive-date = December 20, 2011
 |df          = mdy-all
}}</ref>

In 1906, Luther Lee Blake founded the '''Standard Statistics Bureau''', with the view to providing financial information on non-railroad companies. Instead of an annually published book, Standard Statistics would use 5-by-7-inch cards, allowing for more frequent updates.<ref name="snphistory"/>

In 1941, Paul Talbot Babson purchased Poor's Publishing and merged it with Standard Statistics to become '''Standard & Poor's Corp.''' In 1966, the company was acquired by [[S&P Global|The McGraw-Hill Companies]], extending McGraw-Hill into the field of financial information services.<ref name="snphistory">{{cite web|title=A History of Standard & Poor's |url=http://www.standardandpoors.com/about-sp/timeline/en/us/ |access-date=11 February 2013 |url-status=dead |archive-url=https://web.archive.org/web/20130215110506/http://www.standardandpoors.com/about-sp/timeline/en/us |archive-date=February 15, 2013 }}</ref>

=={{anchor|credit ratings}}Credit ratings==
As a [[credit rating agency]] (CRA), the company issues credit ratings for the debt of public and private companies, and public borrowers such as governments, governmental agencies, and cities. It is one of several CRAs that have been designated a [[nationally recognized statistical rating organization]] (NRSRO) by the [[U.S. Securities and Exchange Commission]].

===Long-term credit ratings===
[[File:BlankMap-World S&P.svg|thumb|552x552px|Countries by Standard & Poor's long-term sovereign rating. '''Legend''':
{{{!}}class="wikitable"
{{!}}-
{{!}}style="background: #006600; color: #ffffff"{{!}}AAA
{{!}}style="background: #009900; color: #ffffff"{{!}}AA+
{{!}}style="background: #00cc00; color: #ffffff"{{!}}AA
{{!}}style="background: #00ff00"{{!}}AA−
{{!}}style="background: #99ff33"{{!}}A+
{{!}}style="background: #ccff66"{{!}}A
{{!}}style="background: #e0ff00"{{!}}A−
{{!}}style="background: #ffffcc"{{!}}BBB+
{{!}}style="background: #ffff66"{{!}}BBB
{{!}}style="background: #ffff00"{{!}}BBB−
{{!}}-
{{!}}style="background: #ffcc99"{{!}}BB+
{{!}}style="background: #ffcc66"{{!}}BB
{{!}}style="background: #ffc200"{{!}}BB−
{{!}}style="background: #ff9933"{{!}}B+
{{!}}style="background: #ff6600"{{!}}B
{{!}}style="background: #ff6666"{{!}}B−
{{!}}style="background: #ff3333"{{!}}CCC+
{{!}}style="background: #e80000; color: #ffffff"{{!}}CCC
{{!}}style="background: #af0000; color: #ffffff"{{!}}CCC−
{{!}}style="background: #000000; color: #ffffff" {{!}}SD/D
{{!}}}]]

S&P rates borrowers on a scale from AAA to D. Intermediate ratings are offered at each level between AA and CCC (such as BBB+, BBB, and BBB−). For some borrowers issuances, the company may also offer guidance (termed a "credit watch") as to whether it is likely to be upgraded (positive), downgraded (negative) or stable.

'''Investment Grade'''
* '''AAA''': An obligor rated 'AAA' has extremely strong capacity to meet its financial commitments. 'AAA' is the highest issuer credit rating assigned by Standard & Poor's.
* '''AA''':  An obligor rated 'AA' has very strong capacity to meet its financial commitments. It differs from the highest-rated obligors only to a small degree. Includes:
** '''AA+''': equivalent to [[Moody's#credit ratings|Moody's]] Aa1 (high quality, with very low credit risk, but susceptibility to long-term risks appears somewhat greater)
** '''AA''':  equivalent to Aa2
** '''AA−''': equivalent to Aa3
* '''A''':   An obligor rated 'A' has strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligors in higher-rated categories.
** '''A+''': equivalent to A1
** '''A''':  equivalent to A2
* '''BBB''': An obligor rated 'BBB' has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.

'''Non-Investment Grade''' (also known as speculative-grade)
* '''BB''':  An obligor rated 'BB' is less vulnerable in the near term than other lower-rated obligors. However, it faces major ongoing uncertainties and exposure to adverse business, financial, or economic conditions, which could lead to the obligor's inadequate capacity to meet its financial commitments.
* '''B''':   An obligor rated 'B' is more vulnerable than the obligors rated 'BB', but the obligor currently has the capacity to meet its financial commitments. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitments.
* '''CCC''': An obligor rated 'CCC' is currently vulnerable, and is dependent upon favorable business, financial, and economic conditions to meet its financial commitments.
* '''CC''':  An obligor rated 'CC' is currently highly vulnerable.
* '''C''':   highly vulnerable, perhaps in bankruptcy or in arrears but still continuing to pay out on obligations
* '''R''':   An obligor rated 'R' is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others.
* '''SD''':  has selectively defaulted on some obligations
* '''D''':   has defaulted on obligations and S&P believes that it will generally default on most or all obligations
* '''NR''':  not rated

===Short-term issue credit ratings===
The company rates specific issues on a scale from A-1 to D. Within the A-1 category, it can be designated with a plus sign (+). This indicates that the issuer's commitment to meet its obligation is very strong. [[Country risk]] and currency of repayment of the obligor to meet the issue obligation are factored into the credit analysis and reflected in the issue rating.

* '''A-1''': obligor's capacity to meet its financial commitment on the obligation is strong
* '''A-2''': is susceptible to adverse economic conditions however the obligor's capacity to meet its financial commitment on the obligation is satisfactory
* '''A-3''': adverse economic conditions are likely to weaken the obligor's capacity to meet its financial commitment on the obligation
* '''B''':   has significant speculative characteristics. The obligor currently has the capacity to meet its financial obligation but faces major ongoing uncertainties that could impact its financial commitment on the obligation
* '''C''':   currently vulnerable to nonpayment and is dependent upon favorable business, financial and economic conditions for the obligor to meet its financial commitment on the obligation
* '''D''':   is in payment default. Obligation not made on due date and grace period may not have expired. The rating is also used upon the filing of a bankruptcy petition.

== Governance scores ==
S&P has had a variety of approaches to reflecting its opinion of the relative strength of a company's [[corporate governance]] practices. Corporate governance serves as investor protection against potential governance-related losses of value, or failure to create value.

===CGS scores===
S&P developed criteria and methodology for assessing corporate governance. It started issuing Corporate Governance Scores (CGS) in 2000. CGS assessed companies' corporate governance practices. They were assigned at the request of the company being assessed, were non-public (although companies were free to disclose them to the public and sometimes did) and were limited to public U.S. corporations. In 2005, S&P stopped issuing CGS.<ref>{{cite web|last1=Taub|first1=Stephen|title=S&P Stops Issuing Governance Scores|url=http://ww2.cfo.com/risk-compliance/2005/09/sp-stops-issuing-governance-scores/|website=CFO|access-date=28 May 2017|date=9 September 2005|url-status=live|archive-url=https://web.archive.org/web/20170827195138/http://ww2.cfo.com/risk-compliance/2005/09/sp-stops-issuing-governance-scores/|archive-date=August 27, 2017|df=mdy-all}}</ref>

===GAMMA scores===
S&P's Governance, Accountability, Management Metrics and Analysis (GAMMA) scores were designed for equity investors in emerging markets and focused on non-financial-risk assessment, and in particular, assessment of [[corporate governance]] risk. S&P discontinued providing stand-alone governance scores in 2011, "while continuing to incorporate governance analysis in global and local scale credit ratings".<ref>{{cite web |title=S&P affirms and withdraws Banco Santander (Brasil) GAMMA score |url=http://lta.reuters.com/article/idLTAWLA450620110901 |website=lta.reuters.com |publisher=Reuters |access-date=28 May 2017 |date=1 September 2011 |url-status=dead |archive-url=https://web.archive.org/web/20180428000942/https://lta.reuters.com/article/idLTAWLA450620110901 |archive-date=April 28, 2018 |df=mdy-all}}</ref>

===Management and Governance criteria===
In November 2012, S&P published its criteria for evaluating insurers and non-financial enterprises' management and governance credit factors.<ref>{{cite web|title=S&P report on criteria for management and governance scores|url=http://mobile.reuters.com/article/idUSWNA943220121113|website=Reuters|access-date=28 May 2017|date=13 November 2012}}</ref> These scores are not standalone, but rather a component used by S&P in assessing an enterprise's overall creditworthiness. S&P updated its management and governance scoring methodology as part of a larger effort to include [[enterprise risk management]] analysis in its rating of debt issued by non-financial companies. "Scoring of management and governance is made on a scale of weak, fair, satisfactory or strong, depending on the mix of positive and negative management scores and the existence and severity of governance deficiencies."<ref>{{cite web|last1=Berkenblit|first1=Howard E.|last2=Trumble|first2=Paul D.|title=Standard & Poor's brings "enhanced transparency" to management and governance credit factors methodology|url=http://www.lexology.com/library/detail.aspx?g=7e04321e-4c29-41b6-a637-450305abc8c5|website=www.lexology.com|publisher=Sullivan & Worcester LLP|access-date=28 May 2017|date=2 January 2013|url-status=live|archive-url=https://web.archive.org/web/20170106235827/http://www.lexology.com/library/detail.aspx?g=7e04321e-4c29-41b6-a637-450305abc8c5|archive-date=January 6, 2017|df=mdy-all}}</ref>

== Downgrades of countries ==

=== Downgrade of U.S. long-term credit rating ===
{{Main|United States federal government credit rating downgrade, 2011}}

On August 5, 2011, following enactment of the [[Budget Control Act of 2011]], S&P lowered the US's sovereign long-term credit rating from AAA to AA+.<ref name=Swann>{{cite press release
 |author      = Swann, Nikola G |display-authors=etal 
 |title       = United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative
 |url         = http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245316529563
 |date        = August 5, 2011
 |publisher   = McGraw-Hill Companies: Standard & Poor's
 |access-date  = August 5, 2011
 |url-status     = live
 |archive-url  = https://web.archive.org/web/20110809073342/http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245316529563
 |archive-date = August 9, 2011
 |df          = mdy-all
}}</ref> The press release sent with the decision said, in part:<blockquote>
* " The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.
* " More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
* " Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon."<ref name=Swann /></blockquote>

The [[United States Department of the Treasury]], which had first called S&P's attention to its $2 trillion error in calculating the ten-year deficit reduction under the Budget Control Act, commented, "The magnitude of this mistake – and the haste with which S&P changed its principal rationale for action when presented with this error – raise fundamental questions about the credibility and integrity of S&P's ratings action."<ref name="bellows">{{cite web
 |last        = Bellows
 |first       = John
 |title       = Just the Facts: S&P's $2 Trillion Mistake
 |publisher   = [[United States Department of the Treasury]]
 |date        = August 6, 2011
 |url         = http://www.treasury.gov/connect/blog/Pages/Just-the-Facts-SPs-2-Trillion-Mistake.aspx
 |access-date  = August 7, 2011
 |url-status     = live
 |archive-url  = https://web.archive.org/web/20110810233439/http://www.treasury.gov/connect/blog/Pages/Just-the-Facts-SPs-2-Trillion-Mistake.aspx
 |archive-date = August 10, 2011
 |df          = mdy-all
}}</ref> The following day, S&P acknowledged in writing the US$2 trillion error in its calculations, saying the error "had no impact on the rating decision" and adding:<ref name=clarifyUS>{{cite press release
 |title       = Standard & Poor's Clarifies Assumption Used on Discretionary Spending Growth
 |url         = http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldata&blobtable=MungoBlobs&blobheadervalue2=inline%3B+filename%3DPressReleaseAug6.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1243943612380&blobheadervalue3=UTF-8
 |publisher   = McGraw-Hill Companies: Standard & Poor's
 |date        = August 6, 2011
 |access-date  = August 6, 2011
 |url-status     = dead
 |archive-url  = https://web.archive.org/web/20150702173115/http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldata&blobtable=MungoBlobs&blobheadervalue2=inline%3B+filename%3DPressReleaseAug6.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1243943612380&blobheadervalue3=UTF-8
 |archive-date = July 2, 2015
 |df          = mdy-all
}}</ref>
<blockquote>In taking a longer term horizon of 10 years, the U.S. net general government debt level with the current assumptions would be $20.1 trillion (85% of 2021 GDP).  With the original assumptions, the debt level was projected to be $22.1 trillion (93% of 2021 GDP).<ref name=clarifyUS /></blockquote>
In 2013, the Justice Department charged Standard & Poor's with fraud in a $5 billion lawsuit: U.S. v. McGraw-Hill Cos et al., U.S. District Court, Central District of California, No. 13-00779. Since it did not charge Fitch and Moody's and because the Department did not give access to evidence, there has been speculation whether the lawsuit may have been in retaliation for S&P's decision to downgrade. 

On April 15, 2013, the Department of Justice was ordered to grant S&P access to evidence.<ref name=wsj>{{cite news|last=Stempel|first=Jonathan|title=S&P fails to split up $5 billion U.S. fraud lawsuit|newspaper=WSJ|date=15 April 2014|url=https://www.reuters.com/article/mcgrawhill-sandp-lawsuit-idUSL2N0N71OW20140415|access-date=29 April 2014|url-status=live|archive-url=https://web.archive.org/web/20140429185626/http://www.reuters.com/article/2014/04/15/mcgrawhill-sandp-lawsuit-idUSL2N0N71OW20140415|archive-date=April 29, 2014|df=mdy-all}}</ref>

=== Downgrade of France's long-term credit rating ===
On November 11, 2011, S&P erroneously announced the cut of France's triple-A rating (AAA). French leaders said that the error was inexcusable and called for even more regulation of private credit rating agencies.<ref>[http://www.euronews.net/2011/11/11/sp-downgrades-france-by-mistake/ S&P downgrades France by ‘mistake' | euronews, economy]. Euronews.net. Retrieved on 2013-12-23.</ref><ref>{{cite news
 |url         = http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/11/14/financial/f100618S56.DTL
 |work        = The San Francisco Chronicle
 |first       = Sarah
 |last        = Dilorenzo
 |title       = France frets about prized AAA debt rating
 |date        = November 14, 2011
 |url-status     = live
 |archive-url  = https://web.archive.org/web/20111115030028/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fn%2Fa%2F2011%2F11%2F14%2Ffinancial%2Ff100618S56.DTL
 |archive-date = November 15, 2011
 |df          = mdy-all
}}</ref>  On January 13, 2012, S&P truly cut France's AAA rating, lowering it to AA+. This was the first time since 1975 that Europe's second-biggest economy, France, had been downgraded to AA+. The same day, S&P downgraded the rating of eight other European countries: [[Austria]], [[Spain]], [[Italy]], [[Portugal]], [[Malta]], [[Slovenia]], [[Slovakia]] and [[Cyprus]].<ref>{{cite news
|last=Gauthier-Villars
|first=David
|title=Europe Hit by Downgrades
|newspaper=[[The Wall Street Journal]]
|date=January 14, 2012
|author2=Forelle, Charles
|page=A1}}</ref>

==Publications==
The company publishes ''The Outlook'', a weekly investment advisory newsletter for individuals and professional investors, published continuously since 1922.<ref>{{cite web|title=Standard & Poor's Premium Publications|url=http://www.netadvantage.standardandpoors.com/NetAd/SPO/help/premium.htm|website=www.netadvantage.standardandpoors.com|access-date=28 May 2017}}{{Dead link|date=September 2018 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> ''Credit Week'' is produced by Standard & Poor's Credit Market Services Group. It offers a comprehensive view of the global credit markets, providing credit rating news and analysis. Standard & Poor's offers numerous other editorials, investment commentaries and news updates for financial markets, companies, industries, stocks, bonds, funds, economic outlook and investor education. All publications are available to subscribers.<ref>{{cite web|title=Standard & Poor's Editorial Features|url=http://www.netadvantage.standardandpoors.com/NetAd/SPO/help/sandp.htm|website=www.netadvantage.standardandpoors.com|access-date=28 May 2017}}{{Dead link|date=September 2018 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>

S&P Dow Jones Indices publishes several blogs that do not require a subscription to access. These include Indexology, VIX Views and Housing Views.<ref>{{cite web|title=Thought Leadership – Overview – S&P Dow Jones Indices|url=http://us.spindices.com/resource-center/thought-leadership/|website=us.spindices.com|access-date=29 May 2017|url-status=live|archive-url=https://web.archive.org/web/20170527070247/http://us.spindices.com/resource-center/thought-leadership/|archive-date=May 27, 2017|df=mdy-all}}</ref>

==Criticism and scandal==
{{See also|Credit rating agency#Criticism|United States public debt}}

===Role in the 2008 financial crisis===
Credit rating agencies such as S&P have been cited for contributing to the [[2008 financial crisis]].<ref name=Klein>{{cite magazine |author      = Klein, Joe |title       = Standard & Poor's Downgrades Itself |url         = https://swampland.time.com/2011/08/06/u-s-downgrades-standard-and-poors/ |date        = August 6, 2011 |magazine        = [[Time (magazine)|Time]] |access-date  = August 6, 2011 |url-status     = live |archive-url  = https://web.archive.org/web/20110918113641/http://swampland.time.com/2011/08/06/u-s-downgrades-standard-and-poors/ |archive-date = September 18, 2011 |df          = mdy-all|author-link = Joe Klein }}</ref>  Credit ratings of AAA (the highest rating available) were given to large portions of even the riskiest pools of loans in the [[collateralized debt obligation]] (CDO) market.  When the [[real estate bubble]] burst in 2007, many loans went bad due to falling housing prices and the inability of bad creditors to refinance.  Investors who had trusted the AAA rating to mean that CDO were low-risk had purchased large amounts that later experienced staggering drops in value or [[toxic assets|could not be sold at any price]]. For example, institutional investors lost $125&nbsp;million on $340.7&nbsp;million worth of CDOs issued by [[Credit Suisse Group]], despite being rated AAA by S&P.<ref name="cdo">{{Cite news |author1=Tomlinson, Richard |author2=Evans, David |title=CDO Boom Masks Huge Subprime Losses, Abetted by S&P, Moody's Fitch |work=[[Bloomberg L.P.|Bloomberg]] |date=May 31, 2007 |access-date=August 6, 2011 |url=https://www.bloomberg.com/apps/news?pid=newsarchive&sid=ajs7BqG4_X8I |url-status=live |archive-url=https://web.archive.org/web/20110720072710/http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ajs7BqG4_X8I |archive-date=July 20, 2011 |df=mdy-all }}</ref><ref name="Klein"/>

Companies pay S&P, Moody's, and [[Fitch Ratings|Fitch]] to rate their debt issues. As a result, some critics have contended that the credit ratings agencies are beholden to these issuers in a [[conflict of interests]] and that their ratings are not as objective as they ought to be, due to this "pay to play" model.<ref>{{cite web|last1=Efing|first1=Matthias|last2=Hau|first2=Harald|title=Corrupted credit ratings: Standard & Poor's lawsuit and the evidence|url=http://voxeu.org/article/corrupted-credit-ratings-standard-poor-s-lawsuit-and-evidence|website=VoxEU.org|access-date=28 May 2017|date=18 June 2013|url-status=live|archive-url=https://web.archive.org/web/20170703041242/http://voxeu.org/article/corrupted-credit-ratings-standard-poor-s-lawsuit-and-evidence|archive-date=July 3, 2017|df=mdy-all}}</ref>

In 2015, Standard and Poor's paid $1.5 billion to the U.S. Justice Department, various state governments, and the [[California Public Employees' Retirement System]] to settle lawsuits asserting its inaccurate ratings defrauded investors.<ref>{{cite news|url=https://www.reuters.com/article/us-s-p-settlement-idUSKBN0L71C120150203|title=S&P reaches $1.5 billion deal with U.S., states over crisis-era...|first=Aruna|last=Viswanatha|website=reuters.com|date=February 3, 2015|access-date=April 28, 2018|url-status=live|archive-url=https://web.archive.org/web/20170417043301/http://www.reuters.com/article/us-s-p-settlement-idUSKBN0L71C120150203|archive-date=April 17, 2017|df=mdy-all}}</ref>

===Criticism of sovereign debt ratings===
In April 2009, the company called for "new faces" in the [[Government of Ireland|Irish government]], which was seen as interfering in the democratic process. In a subsequent statement they said they were "misunderstood".<ref>{{cite news
|author=GAA Video 
|url=http://www.independent.ie/national-news/cowen-attacks-call-for-new-faces-in-cabinet-1693290.html 
|title=Cowen Attacks Call for 'New Faces' in Cabinet
| work = [[Irish Independent]] 
|date= April 1, 2009
|access-date= August 7, 2011}}</ref>

S&P acknowledged making a US$2 trillion error in its justification for downgrading the credit rating of the United States in 2011,<ref>{{cite news
 |author      = Paletta, Damian
 |title       = U.S. Debt Rating in Limbo as Treasury Finds Math Mistake by S&P in Downgrade Warning
 |date        = August 5, 2011
 |url         = https://blogs.wsj.com/marketbeat/2011/08/05/u-s-debt-rating-in-limbo-as-treasury-finds-math-mistake-by-sp-in-downgrade-warning/
 |work        = [[The Wall Street Journal]]
 |access-date  = August 5, 2011
 |url-status     = live
 |archive-url  = https://web.archive.org/web/20110813051506/http://blogs.wsj.com/marketbeat/2011/08/05/u-s-debt-rating-in-limbo-as-treasury-finds-math-mistake-by-sp-in-downgrade-warning/
 |archive-date = August 13, 2011
 |df          = mdy-all
}}</ref> but stated that it "had no impact on the rating decision".<ref>{{cite news
 |author      = Goldfarb, Zachary A.
 |title       = S&P Downgrades U.S. Credit Rating for First Time
 |url         = https://www.washingtonpost.com/business/economy/sandp-considering-first-downgrade-of-us-credit-rating/2011/08/05/gIQAqKeIxI_story.html
 |date        = August 5, 2011
 |newspaper        = [[The Washington Post]]
 |access-date  = August 5, 2011
 |url-status     = live
 |archive-url  = https://web.archive.org/web/20110806010020/http://www.washingtonpost.com/business/economy/sandp-considering-first-downgrade-of-us-credit-rating/2011/08/05/gIQAqKeIxI_story.html
 |archive-date = August 6, 2011
 |df          = mdy-all
}}</ref>

===Australian Federal Court decision===
In November 2012, Judge [[Jayne Jagot]] of the [[Federal Court of Australia]] found that:
"A reasonably competent ratings agency could not have rated the Rembrandt 2006-3 [[Constant proportion debt obligation|CPDO]] [[Bond credit rating|AAA]] in these circumstances";<ref name="jagot">{{cite AustLII|FCA|1200|2012|litigants=Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) |date=5 November 2012 |courtname=auto}}.</ref> and
"S&P’s rating of AAA of the Rembrandt 2006-2 and 2006-3 CPDO notes was misleading and deceptive and involved the publication of information or statements false in material particulars and otherwise involved negligent misrepresentations to the class of potential investors in Australia, which included Local Government Financial Services Pty Ltd and the councils, because by the AAA rating there was conveyed a representation that in S&P’s opinion the capacity of the notes to meet all financial obligations was “extremely strong” and a representation that S&P had reached this opinion based on reasonable grounds and as the result of an exercise of reasonable care when neither was true and S&P also knew not to be true at the time made."<ref name="jagot" />

In conclusion, Jagot found Standard & Poor's to be jointly liable along with [[ABN Amro]] and Local Government Financial Services Pty Ltd.<ref name="jagot" />

==Antitrust review==
In November 2009, ten months after launching an investigation, the [[European Commission]] (EC) formally charged S&P with abusing its position as the sole provider of international securities identification codes for [[United States|United States of America]] [[Security (finance)|securities]] by requiring European [[Financial institution|financial firms]] and data vendors to pay licensing fees for their use. "This behavior amounts to unfair pricing," the EC said in its statement of objections which lays the groundwork for an adverse finding against S&P. "The (numbers) are indispensable for a number of operations that financial institutions carry out&nbsp;– for instance, reporting to authorities or clearing and settlement&nbsp;– and cannot be substituted.”<ref>{{cite web
 |url         = http://www.securitiestechnologymonitor.com/news/-24275-1.html
 |title       = EC Charges S&P With Monopoly Abuse
 |year        = 2009
 |editor      = Securities Technology Monitor
 |url-status     = dead
 |archive-url  = https://web.archive.org/web/20110716033737/http://www.securitiestechnologymonitor.com/news/-24275-1.html
 |archive-date = July 16, 2011
 |df          = mdy-all
}}</ref>

S&P has run the [[CUSIP|CUSIP Service Bureau]], the only [[International Securities Identification Number]] (ISIN) issuer in the US, on behalf of the [[American Bankers Association]]. In its formal statement of objections, the EC alleged "that S&P is abusing this monopoly position by enforcing the payment of licence fees for the use of US ISINs by (a) banks and other financial services providers in the EEA and (b) information service providers in the EEA." It claims that comparable agencies elsewhere in the world either do not charge fees at all, or do so on the basis of distribution cost, rather than usage.<ref>
{{cite web
 |url         = http://www.finextra.com/news/fullstory.aspx?newsitemid=20768
 |title       = European Commission Accuses S&P of Monopoly Abuse over Isin Fees
 |year        = 2009
 |editor      = Finextra
 |url-status     = live
 |archive-url  = https://web.archive.org/web/20110312100847/http://www.finextra.com/news/fullstory.aspx?newsitemid=20768
 |archive-date = March 12, 2011
 |df          = mdy-all
}}</ref>

==See also==
{{portal bar|New York City|Companies|Economics}}
* [[Global Industry Classification Standard]]
* [[List of countries by credit rating]]
* [[Nationally recognized statistical rating organization]]
* [[Moody's Ratings]]
* [[Fitch Ratings]]

==References==
{{Reflist|30em}}

==External links==
* {{Official website}}
* [https://www.spglobal.com/ratings/en/ S&P Global Ratings]
* [https://www.spglobal.com/spdji/en/ S&P Dow Jones Indices]
* [https://www.spglobal.com/ratings/en/about/intro-to-credit-ratings Intro to Credit Ratings] – Standard & Poor's
* [https://www.spglobal.com/en/who-we-are/our-history History of Standard & Poor's]

{{McGraw-Hill}}
{{NRSRO}}
{{Authority control}}

{{DEFAULTSORT:Standard and Poor's}}
[[Category:S&P Global| ]]
[[Category:American companies established in 1941]]
[[Category:Financial services companies established in 1941]]
[[Category:Credit rating agencies]]
[[Category:Financial services companies based in New York City]]
[[Category:Financial data vendors]]
[[Category:1941 establishments in New York City]]
[[Category:1966 mergers and acquisitions]]