Financial Data and Key Metrics Changes - Moody's reported second quarter revenue of $1.9 billion, representing a 4% year-over-year growth, despite a tough comparison to the previous year's 22% growth [6][7] - Adjusted operating margin improved to 50.9%, up 130 basis points from a year ago, translating to adjusted diluted EPS of $3.56, a 9% increase [7][8] - The company narrowed its guidance ranges for rated issuance, MIS revenue, and EPS based on second quarter performance [8] Business Line Data and Key Metrics Changes - MIS revenue was flat year-over-year at $1 billion, with a favorable issuance mix contributing to transaction revenue growth despite a 12% decline in overall issuance [26][27] - Moody's Analytics (MA) revenue grew 11%, with recurring revenue increasing by 12%, driven by strong demand in Decision Solutions [31][32] - Private credit-related transactions accounted for nearly 25% of first-time mandates, with revenue related to private credit growing 75% year-over-year [12][84] Market Data and Key Metrics Changes - The U.S. public finance group rated the highest quarterly issuance volume since 2007, with first-time mandates nearly reaching 200 in the second quarter [29] - In EMEA, first-time mandates increased year-over-year, driven by private credit mandates [30] - The private credit market continues to grow, with significant demand for ratings as investors seek transparency and comparability [95][96] Company Strategy and Development Direction - Moody's is focused on strengthening its position in private credit markets and enhancing its analytics capabilities through strategic partnerships, such as with MSCI [13][20] - The company is investing in digital transformation and AI adoption to capitalize on multi-year investment cycles for customers [42] - Moody's aims to leverage its data integration with major technology players to enhance customer access and monetization opportunities [21][20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second half of the year, highlighting key credit themes that could influence performance [10] - The company is monitoring macroeconomic and geopolitical uncertainties that may impact issuance volumes [39] - Management emphasized the importance of maintaining a disciplined expense management approach to support margin expansion [66] Other Important Information - Moody's Analytics achieved a 96% recurring revenue rate, reinforcing the predictability of its business model [14] - The company completed the acquisition of ICR Chile, enhancing its presence in the Latin American bond market [19] - Moody's received recognition for its innovative solutions, being ranked number one in quantitative analytics for the third consecutive year [15] Q&A Session Summary Question: Insights on Decision Solutions and KYC - Management acknowledged strategic terminations and government-related attrition affecting KYC and insurance, but noted strong growth in banking lending products [46][48] Question: Potential Pull Forward of Issuance - Management indicated no significant pull forward of issuance occurred, with both public and private credit markets performing well [57][58] Question: Operating Margin Expansion - Management clarified that the margin expansion was due to operational efficiencies and not due to expense shifts from Q2 to later quarters [64][66] Question: Banking Sector Performance - Management noted that while banking ARR has seen declines, lending products are showing strong growth, particularly with the integration of Numerated [70][71] Question: AI and GenAI Contributions - Management highlighted that while standalone AI revenue is not material, early adopters of GenAI are showing double the growth compared to other customers [78][80] Question: Private Credit Contributions - Management confirmed that private credit is contributing to various revenue streams, particularly in structured finance and first-time mandates [84][83]

Carlyle Group hired a Goldman executive to lead its direct lending arm as the money manager works to grow its private credit business https://t.co/mwiOWzw9mA ...

Financial Data and Key Metrics Changes - The company reported a record total assets under management (AUM) of slightly over $2,000 billion, which is $157 billion or 8% higher than the end of the first quarter and $286 billion or 17% higher than the end of the second quarter of 2024 [28] - Average long-term AUM increased by 1% over the last quarter and 12% over the second quarter of last year, reaching $1,340 billion [28] - Adjusted diluted earnings per share were $0.36 for the second quarter, with net revenues of $1,100 million, which is $19 million higher than the same quarter last year [30][38] Business Line Data and Key Metrics Changes - The company generated $15.6 billion in net long-term asset inflows, representing a 4.7% annualized growth rate [10] - The global ETFs and index platform reported 10% annualized organic growth, with $12.6 billion of long-term net inflows in the quarter [11] - Fundamental fixed income garnered nearly $3 billion of net long-term inflows, while private markets experienced net outflows of $2 billion [29][22] Market Data and Key Metrics Changes - The Asia Pacific and EMEA regions accounted for 40% of overall long-term client AUM, generating $31 billion of net flows in the first half of 2025 [11] - The China joint venture and India capabilities delivered $5.6 billion of net long-term inflows, with a record high AUM of $105 billion in the China JV [21] - The company saw net outflows of $3.6 billion in fundamental equities, although there were positive flows from EMEA and Asia Pacific [22][23] Company Strategy and Development Direction - The company is focused on enhancing client outcomes, improving operating leverage, and strengthening its balance sheet [4] - A partnership with MassMutual and Barings aims to leverage private credit strengths and expand product offerings in the U.S. Wealth channel [6] - The company is pursuing a hybrid approach to investment management, utilizing platforms from both State Street and BlackRock to optimize outcomes for clients [40] Management's Comments on Operating Environment and Future Outlook - Management noted that the second quarter experienced pronounced market volatility, but strong momentum carried into July, leading to a global rebound for equities [10] - The company is optimistic about its ability to navigate market cycles due to a diversified asset mix and strong geographic presence [25][32] - Management emphasized the importance of improving operating cash flow to balance growth and deleveraging efforts [59][62] Other Important Information - The company completed the repurchase of $1 billion of preferred stock held by MassMutual, funded by bank term loans, which is expected to reduce preferred dividends significantly [30][44] - The company intends to continue common share repurchases and aims for a total payout ratio of near 60% from 2025 [45] - The filing of a preliminary proxy statement seeks approval to change the operational structure of the QQQ from a unit investment trust to an open-end fund ETF [35] Q&A Session Summary Question: Why is the company proposing changes to the QQQ structure now? - Management indicated that the proposal aims to modernize the structure to enhance outcomes for clients and shareholders, reflecting changes in market conditions since the QQQ was launched in 1999 [52][53] Question: How will the changes impact marketing spend and incremental margin? - The anticipated marketing budget for the trust is between $60 million to $100 million, translating to 2 to 3 basis points of annual assets, with an expected addition of four basis points to net revenue and operating income if approved [55] Question: How does the company balance deleveraging with growth? - Management stated that both growth and deleveraging are priorities, with a focus on improving operating cash flow to provide flexibility for growth initiatives [59][62] Question: What is the company's strategy for private markets? - The company is focused on partnerships and acquisitions to enhance its private markets capabilities, with a strong emphasis on organic growth as well [76] Question: How does the company view the potential for private markets in the 401(k) space? - Management believes there is promise for private markets in defined contribution plans, contingent on regulatory changes and market demand [84]

How to utilize Apollo's private credit fund, ACRED, in DeFi on Polygon.Loop yield via a @gauntlet_xyz optimized vault on @MorphoLabs, enabled by @Securitize.It's institutional DeFi in action.interob (@robinson):What does institutional adoption actually look like today?Not institutions buying and holding crypto but issuing offchain assets -> onchain (RWA's) and utilizing them in DeFiEnd-to-End Private Credit Example 🧵 .. ...

Bank Regulation & Reform - The Federal Reserve is hosting a conference on bank regulation, signaling a potentially significant regulatory reset for the banking industry [1][2] - The goal is to reduce bureaucracy and red tape to enable banks to be more efficient and increase lending capacity [3][4] - The Treasury Secretary and Fed Chairman aim to deleverage the public sector and releverage the private sector through banks [4] - The industry views current regulations as too burdensome after 15 years since the global financial crisis, suggesting a need for reform [5] - Nine out of ten investors find the capital rules too confusing, highlighting the need for more understandable regulation [8] Potential Risks & Future Landscape - The next financial crisis is unlikely to mirror the last one, necessitating a more dynamic regulatory environment [9] - Private credit has grown significantly (5-10 times) since the global financial crisis, raising concerns about its procyclicality in a recession [11] - There are concerns about the leverage within some private credit funds and who bears the ultimate risk [14] - Banks have de-risked over the past 15 years, with capital and liquid assets roughly doubling [14] - Lending to non-bank financials, such as private credit firms, has increased, but more data is needed [15] Investment Opportunity - Wells Fargo analyst recommends Citigroup, citing its restructuring efforts and potential benefits from tariffs; the stock is up 43% for the year and 31% year-to-date [16][17]

Mubadala Investment and AXA IM Prime are taking minority stakes in European private credit firm Hayfin Capital, a statement seen by Bloomberg shows https://t.co/peWOQnyK32 ...

Market Prediction - Private credit 预计在一年内将成为 RWA 市场中至少 1000 亿美元的领域 [1] - 这种趋势已经开始显现 [1]

Australia’s corporate watchdog is scrutinizing private credit manager Metrics Credit Partners, people familiar said. Read today's Australia Briefing by @ainsley_thomson for your daily dose of the best of Bloomberg. https://t.co/qyR7XSicYo ...

How should we interpret these comments from uh Waller. Uh you know Fed governor of course we have a meeting coming up in July. Also Waller has been floated as a potential successor to J Pal.How do you view it as someone who's a market participant. We are certainly getting mixed signals u as far as you know where what the Fed is thinking and where the path of interest rates may go from here. Uh we saw a little bit of a tick up this week in CPI.So, but overall inflation has been relatively tame in spite of th ...

Apollo Global Management won the mandate to manage Singapore’s $1 billion private credit fund targeting local high growth enterprises https://t.co/zQbJONSAG3 ...