In the early years of Moody’s, Standard, Poor’s, and Fitch, they earned revenue
by selling their assessments of creditworthiness to investors. This occurred in the
era before the Securities and Exchange Commission (SEC) was created in 1934 and
began requiring corporations to issue standardized fifi nancial statements. These
judgments come in the form of “ratings,” which are usually a letter grade. The
best-known scale is that used by Standard & Poor’s and some other rating agencies:
AAA, AA, A, BBB, BB, and so on, with pluses and minuses as well....