The Big Three Credit Rating Agencies

Why credit rating agencies matter

Every year, tens of trillions of dollars of debt, from government bonds to CLO tranches, are priced, regulated, and invested based on opinions issued by just three firms. Together, S&P Global Ratings, Moody’s Investors Service, and Fitch Ratings form one of the most powerful and concentrated oligopolies in global finance.

This research explores who they are, how they make money, their financials, competitive strengths, and the risks facing the industry.

1. Background & History

S&P Global Ratings

S&P traces its roots back to 1860, initially providing financial information on U.S. railroads. It evolved through the merger of Standard Statistics and Poor’s Publishing in 1941. Today, S&P Global Ratings operates as a division of S&P Global, alongside indices (S&P 500), commodities (Platts), and data services.

Moody’s Investors Service

Founded in 1909, Moody’s began by publishing manuals on industrial securities. Over time, it became synonymous with sovereign and corporate credit analysis. In 2000, Moody’s was spun off as Moody’s Corporation, allowing it to expand aggressively into analytics, risk software, and economic research.

Fitch Ratings

Established in 1913, Fitch is the youngest of the three. Now owned by Hearst Corporation, Fitch operates with dual headquarters in New York and London and is widely viewed as a “tie-breaker” when S&P and Moody’s disagree.

2. Business Model & Strategy

All three agencies primarily operate on an issuer-pays model:

• Issuers (governments, corporations, banks) pay for ratings

• Investors rely on those ratings for risk assessment and regulatory compliance

Strategic differences:

• S&P Global Ratings leverages deep integration with S&P’s data, indices, and analytics ecosystem.

• Moody’s has diversified furthest, with Moody’s Analytics generating recurring, subscription-based revenue.

• Fitch is expanding data, ESG, and training products to reduce reliance on pure ratings fees.

Despite controversy, the issuer-pays model remains dominant due to regulation, network effects, and market acceptance.

3. Revenues & Profit (by Segment & Geography)

Moody’s Corporation (most transparent)

• Total revenue: ~$7.1bn

• Moody’s Investors Service (ratings): ~$3.8bn

• Moody’s Analytics: ~$3.3bn

• Operating margins exceed 45–50%, among the highest in financial services.

S&P Global Ratings

• Ratings is a multi-billion-dollar division, but results are reported within S&P Global’s broader segments.

• Total revenue: ~$3.3bn (S&P Global Ratings only)

• Highly profitable, benefiting from operating leverage and minimal capital intensity.

Fitch Ratings

• Estimated revenue of ~$1.7bn

• Financials are consolidated into Hearst (private), limiting transparency.

Geography: All three generate the majority of revenues from North America and Europe, with growing exposure to Asia and emerging markets driven by debt market expansion.

Category	% Estimated Market Share
North America	~50%
Europe	~30%
Asia Pacific	~15%
MEA	~5%

4. Market Size & Market Share

The global credit-rating market is extremely concentrated, with credit rating operations (excluding adjacent data/analytics business) lies around $10.6bn to $11bn annually, CAGR ~4%:

Agency	Estimated Market Share
S&P Global Ratings	~40%
Moody’s Investors Service	~32–40%
Fitch Ratings	~12–15%
Others (Morningstar DBRS, local agencies)	<10%

Together, the Big Three control 90%+ of the global ratings market. A level of concentration rarely seen in modern finance.

5. Financial Snapshot (Latest Public Data)

Metric	S&P Global*	Moody’s Corp	Fitch Ratings
Revenue	~$11–12bn (parent)	~$7.1bn	~$1.7bn
EBITDA Margin	~$47-50%	~50%+	Not disclosed
Free Cash Flow	~$5.5bn	~$2.7bn	Not disclosed
Market Cap	$163bn	~$86.8bn	Private
EV / EBITDA	~25x (trailing)	~25x (trailing)	N/A
Listing	NYSE: SPGI	NYSE: MCO	Pvt

*S&P Global Ratings is a division; metrics shown are at the parent level.

Key takeaway: Credit rating agencies are cash-generative, capital-light, and structurally high-margin businesses.

6. Competitive Strengths

Structural Moats (Shared)

• Regulatory recognition (NRSRO status)

• Embedded in investment mandates and capital rules

• Massive historical datasets

• High switching costs for issuers and investors

Agency-Specific Strengths

• S&P Global Ratings: unmatched brand recognition and platform integration

• Moody’s: strongest diversification and analytics franchise

• Fitch: credibility as an independent third opinion and strong structured-finance depth

This combination makes the Big Three extraordinarily resilient across credit cycles.

7. Risks & Challenges

Industry-Level Risks

• Conflict-of-interest scrutiny (issuer-pays model)

• Regulatory pressure following crises (2008, structured credit)

• Private credit growth, where ratings may be bypassed

• Increased competition from specialized and regional agencies

Company-Specific Risks

• S&P & Moody’s: cyclicality tied to debt issuance volumes

• Moody’s Analytics: exposure to enterprise software churn

• Fitch: smaller scale and lower financial transparency

Despite these risks, no credible challenger has yet threatened the Big Three’s dominance.

Final Thoughts

Credit rating agencies sit at the intersection of markets, regulation, and trust. While often criticized, their role in modern finance is deeply embedded and extraordinarily profitable.

• For investors, they represent high-margin data monopolies

• For professionals, they offer exposure to macro risk, structured finance, sovereign analysis and capital markets

• For regulators, they remain both indispensable and controversial

In global finance, few opinions matter more than a credit rating and almost all of them come from just three names.