NRSRO – Nationally Recognized Statistical Rating Agency
Unlike previously-recognized NRSRO rating firms, Egan-Jones is not paid by issuers but is paid 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 Greece, Spain, Italy, Portugal, the US Auto manufacturers and homebuilders, Enron, WorldCom, the California utilities crisis, and Delphi.
Per the 2011 report, "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse" issued by the U.S. Senate Permanent Subcommittee on Investigations, chaired by Carl Levin, a primary cause of the 2007-2008 credit crisis was reliance on inflated ratings proffered by issuer-supported rating firms. A recent high profile example of the fallout 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.
Egan-Jones' NRSRO license covers Corporate, Financial/Bank and Insurance Companies; its license does not cover Sovereign or Structured Finance issuers.
Disclosure March 2013 - Annual Certification
Disclosure February 2013 - NRSRO Amendment
Disclosure March 2012 - Annual Certification