Direct Answer
Credit rating agencies assign letter grades to the debt of companies, governments and structured products, and sell research and data. They earn fees from issuers on new debt and subscriptions from investors, so bond issuance volume drives revenue.
Industry Overview
Credit Rating Agencies sits within the financials sector. The first numbers to compare across companies here are rated issuance volume, recurring revenue share and operating margin. The outside forces that move them are listed under Primary Macro Drivers.
Key Industry Metrics
- Rated issuance volume: Amount of debt that issuers brought to market with a rating. It drives transaction fees, so it is cyclical, rising when borrowing is cheap and falling when markets close.
- Recurring revenue share: Portion of revenue from subscriptions and ongoing surveillance fees rather than one-time deal fees. A higher share cushions earnings when issuance is weak.
- Operating margin: Operating income as a share of revenue. Rating work is information-based with few rivals, so margins are high, and the trend shows cost control and pricing power.
- Price per rating: Average fee earned per rated debt instrument, which varies by size and type. Rising fees show pricing power or a richer mix, such as complex structured products.
- Research and analytics growth: Growth in revenue from data, analytics and non-rating products. It diversifies earnings away from issuance cycles, though it faces competition from other data vendors.
Primary Macro Drivers
- Corporate and structured debt issuance: Fees are earned when debt is issued, so more bonds and structured deals mean more ratings fees and revenue, and fewer deals reduce transaction revenue.
- Refinancing waves: When many borrowers refinance at once, the agencies rate more new debt, boosting rated issuance volume in that period.
- Regulatory use of ratings: Rules that tie investor holdings or capital to ratings make a rating a required input, supporting steady demand and price per rating.
- Demand for data and analytics: Subscription data, analytics and research sell to investors and risk teams, adding recurring revenue less tied to issuance volume.
Major Risks
- Issuance slowdowns: Rating fees follow new debt, so credit market freezes or higher rates cut transaction revenue quickly. Watch rated issuance volume against the recurring revenue share.
- Regulatory and legal exposure: Rating errors or conflicts of interest can bring suits and rule changes that raise costs. Watch litigation disclosures and regulatory actions.
- Reputational damage from rating errors: A visible miss, such as a late downgrade, harms issuer and investor trust and can lower rating demand. Watch commentary on market share and issuer retention.
- Competition from alternative data sources: Investors and issuers may use market-implied or in-house models in place of ratings or subscriptions. Watch research and analytics growth and renewal rates.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Mixed |
| Capital Intensity | Low |
| Regulatory Intensity | Medium |
| Industry Maturity | Mature |
| Geographic Importance | Global |
Companies Associated with Credit Rating Agencies
The SEC's Standard Industrial Classification has no code that describes credit rating agencies as a group, so there is no complete list of its filers. The companies below come from Swoopr's SEC dataset and have operations in or next to the industry. Each is classified by the SEC under its own main business.
| Company | SEC classification | Revenue | Growth | Net margin | Year |
|---|---|---|---|---|---|
| S&P Global Inc. | Services-Consumer Credit Reporting, Collection Agencies | $15.3 billion | 7.9% | 29.2% | FY 2025 |
| Morningstar, Inc. | Investment Advice | $2.4 billion | 7.5% | 15.3% | FY 2025 |
Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. Listing here describes a business relationship to the industry, not a recommendation. To find more companies, use the company directory and the financials hub.
Where to Go Next
The Credit Rating Agencies guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
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Frequently Asked Questions
What are the main KPIs for the Credit Rating Agencies industry?
Key performance indicators for the Credit Rating Agencies industry include: Rated issuance volume, Recurring revenue share, Operating margin, Price per rating, Research and analytics growth. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Credit Rating Agencies industry?
The Credit Rating Agencies industry exhibits mixed cyclicality characteristics. Some segments move with the broader economy while others maintain more stable demand, making stock selection within the group particularly important.
What are the biggest risks in the Credit Rating Agencies industry?
The primary risks for Credit Rating Agencies companies include: Issuance slowdowns, Regulatory and legal exposure, Reputational damage from rating errors, Competition from alternative data sources. Investors should assess each company's exposure to these factors and its track record of navigating them.