Two of the leading ratings agencies, Fitch and Moody's Investors Service, have recently been actively pursuing plans to expand their activities. First, Fimalac, the parent company of Fitch, announced that it has bought out the BankWatch ratings business from the Thomson Corporation. Moody's then revealed that it has signed an affiliation agreement with the Czech Rating Agency (CRA), something that had been widely speculated in recent months.
Under the terms of the Fimalac-BankWatch deal, Thomson will acquire a 3.4% interest in Fitch. The latest move follows the acquisition of Duff and Phelps in March (ASRI 3/13/2000 p.1), and is another indicator of Fitch's attempt to be right up there with Standard & Poor's and Moody's.
"This acquisition will enhance Fitch's ability to provide international bank rating services, bringing us many excellent analysts and further strengthening our international banking coverage," said Robin Monro-Davies, chief executive officer at Fitch.
Meanwhile, Moody's affiliation agreement will involve it offering technical assistance to the CRA, joint research programs between the two parties as well as a combined effort to promote awareness of credit analysis in the Czech Republic.
Of the former Eastern European states, the Czech Republic has been one of the more successful to establish financial and capital markets, and many investment banks have begun exploring the possibilities, one of which being the development of securitization techniques.
For that reason, and because of the CRA's advantageous geographical position in Prague, Moody's will be getting a foothold in a developing region. "Prague already is a regional intermediation and conference hub for Central and Eastern Europe's growing markets," explained Chester Murray, European managing director at Moody's.
"The affiliation of CRA with Moody's is a recognition of CRA's reputation in the Czech market," opinioned Peter Vins, chairman of the CRA. "CRA has a strong position in its home market and with the Moody's affiliation, CRA and Moody's will be able to build strong positions in Central and Eastern Europe."
Moody's European group also announced recently that it has appointed Lin Li-Williams in the role of associate analyst and Edward Manchester as an assistant vice president - analyst. Li-Williams, formerly of Morgan Stanley Dean Witter, will work primarily on commercial mortgage- backed transactions in Europe, and reports to Detlef Scholz. Manchester joins from Clifford Chance where he worked as an assistant solicitor within the securitization team. He will focus on the asset-backed commercial paper markets, and reports to Frederic Drevon, joint head of the European structured finance team alongside Scholz.