The credit rating agencies were asleep at the wheel when the subprime mortgage industry crashed and burned. Now, media giant McGraw-Hill Cos. has found a new driver to guide one of its most profitable units, rating agency Standard & Poor's. The New York-based media company replaced Standard & Poor's president Kathleen Corbet with Deven Sharma on Aug. 30. Corbet resigned amid deep criticism that rating agencies have failed to properly evaluate the debt of mortgage companies and warn investors in a timely fashion of the dire conditions of the subprime mortgage industry. In a slew of a couple of weeks, subprime mortgage companies such as American Home Mortgage Investment Corp., New Century Financial Corp. and Alliance Corp. have crashed into bankruptcy without adequate forewarning from the three biggest rating agencies — S&P, Moody's Investor Services and Fitch Ratings. — Gerald Magpily
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S&P,
debt ratings
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