NRSRO – Nationally Recognized Statistical Rating Agency

New Era Begins!

The financial markets begin a new era in 2008 with the SEC’s granting of NRSRO (Nationally Recognized Statistical Rating Agency) status to Egan-Jones Ratings Company. Unlike all previously recognized NRSRO rating firms, Egan-Jones is not paid by issuers but is paid solely by institutional investors. Since issuer interests are often not aligned with investor interests, a rating firm representing investors is a welcome change. In addition to warning clients about Countrywide, New Century the monoline insurance firms such as Ambac, ACA, MBIA MGIC and Radian, Egan-Jones Ratings provided early warning to clients about the US Auto manufacturers and the homebuilders, Enron, WorldCom, the California utilities crisis, and Delphi.

A primary cause of the current credit crisis has been reliance on inflated ratings proffered by issuer-supported rating firms. The most recent high profile example was the Florida State money market pool’s freezing redemptions and recording losses in excess of $1.5B as a result of investments in over-rated issuers such as Countrywide and various SIV’s.

To protect investors and increase returns, hedge funds, fiduciaries and large commercial lenders would be well-served to review ratings issued by non-conflicted rating firms. Currently, Egan-Jones maintains ratings significantly different (two notches or more) than the issuer-supported rating firms on approximately 400 firms including MBIA, Ambac, Bear Stearns, Ford, GM and others.

Disclosure March 2011

Disclosure March 2010

Disclosure March 2009

Disclosure July 2008

Disclosure September 2008

Disclosure March 2008