Standard and Poor's
Standard and Poor's is a division of publisher McGraw-Hill (NYSE: ticker MHP) which (1) provides bond ratings for fixed income investments, (2) publishes reports on stocks and related investments, and (3) maintains the S&P 500 Index.
Overall, S&P the company provides information ("financial market intelligence," as the company likes to say) to help investors make decisions. It offers credit ratings, maintains various stock market indices, and provides equities research as well as research on industries and trends.
S&P was founded in 1860 and acquired by McGraw-Hill in 1966. Its Capital IQ division provides far-reaching information on more than 42,000 public companies, 518,000 private companies, and 9,500 private capital firms worldwide.
An S&P credit rating represents its analysts' opinions of the creditworthiness of the business in question. Standard & Poor's Ratings Services is one of several "nationally recognized statistical rating organizations", NRSROs, that comply with Securities and Exchange Commission regulations that mandate release to the public of information on how they make decisions. Moody's Investors Service and Fitch Inc. are also NRSROs.
No credit-rating agency's reputation or size should blind investors to the fact that the ratings are opinions, not facts, put together by humans, who make mistakes. Some lay part of the blames for the subprime meltdown at the feet of ratings agencies who gave the thumbs-up to mortgage vehicles that turned out to be too shaky to survive.
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