Moody’s(US:MCO)2025-11-18 19:20Summary of Moody's Conference Call Company Overview - Company: Moody's Corporation (NYSE: MCO) - Event: Info Services Track of the Ultimate Service Investor Conference - Date: November 18, 2025 Key Points Industry Insights - M&A Activity: There has been a significant increase in M&A activity in the second half of the year, contrary to initial expectations. This includes both strategic and sponsor-backed M&A, which positively impacts issuance volumes [7][10] - Economic Growth: Economic growth has slowed but remains better than market expectations, contributing to a favorable environment for debt issuance [7][8] - Default Rates: Default rates are slightly above long-term averages but have been decreasing, which is conducive for issuance [8] - Issuance Trends: The strongest issuance has been in the corporate segment, particularly in investment-grade and leveraged finance [8] Financial Performance - Revenue Growth: Moody's anticipates medium-term organic revenue growth targets of high single digits to low double digits, with a focus on areas with strong growth potential [18][19] - Refinancing Needs: A significant amount of debt issued over the past five years will need refinancing, which supports future issuance [11][12] AI and Technology - AI Opportunities: The company views AI as a significant opportunity to monetize proprietary data and analytics, enhancing customer engagement and expanding use cases [20][21][26] - Digital Fulfillment: Moody's is developing a digital fulfillment model to better serve customers and monetize content across various platforms [30][31] Market Dynamics - Investor Sentiment: There is growing interest among investors regarding the credit quality of private credit funds, indicating a shift in focus towards understanding credit risk [48][59] - Partnership with MSCI: The collaboration aims to provide Moody's modeled credit ratings to investors in private credit, enhancing their understanding of credit risk [49][50] Challenges and Considerations - Two-Speed Economy: The U.S. economy is experiencing a two-speed dynamic, with disparities in growth across different sectors, particularly between the AI-driven economy and traditional sectors [15] - Structured Finance Outlook: There has been a modest reduction in the outlook for structured finance and public category issuance, attributed to slower growth in consumer finance [14][15] Strategic Focus - Investment Areas: Moody's plans to invest in segments with the strongest growth potential, including banking, lending, and insurance [19][38] - Proprietary Data Utilization: The company emphasizes the value of its proprietary data in various applications, including risk assessment and credit modeling [37][40] Conclusion - Moody's is positioned to leverage its proprietary data and analytics capabilities to navigate the evolving market landscape, particularly in the context of increasing M&A activity and the integration of AI technologies. The focus on understanding credit risk in private credit markets presents a significant opportunity for growth and engagement with investors [58][59]