Fitch Ratings, the smallest of the Big Three credit judges
Founded in New York on Christmas Eve 1914 as a publishing company, Fitch became one of three agencies whose letter grades help decide what governments and companies pay to borrow. As the smallest of the trio, it has often cast the deciding vote when its two larger rivals disagree slightly.
John Knowles Fitch started the Fitch Publishing Company on 24 December 1914. A group including Robert Van Kampen bought it in 1989, and in 1997 the French holding company FIMALAC acquired it and merged it with IBCA, its London-based subsidiary. Two purchases in 2000, Duff & Phelps Credit Rating of Chicago in April and Thomson Financial BankWatch in December, added scale. Today it has headquarters in both New York and London.
The US Securities and Exchange Commission recognises it as one of three nationally recognised statistical rating organisations, alongside Moody's and S&P Global Ratings. Fitch covers less of the market than the other two, but its growth through acquisitions and its habit of acting as a tie-breaker between similar but unequal ratings have kept it influential.
Ownership shifted gradually to the American media group Hearst. It bought 20 percent in 2006, raised its holding to 80 percent in December 2014 in a deal worth $1.965 billion, and took the last 20 percent from FIMALAC for $2.8 billion in April 2018. The wider Fitch Group employs around 5,000 people, over 1,600 of them analysts, and sold its risk software business Algorithmics to IBM for $387 million in 2011.
The 2008 financial crisis damaged all the agencies. They were accused of understating the dangers of mortgage-linked securities, and in one case Credit Suisse debt obligations worth $340.7 million, rated AAA by Fitch, lost about $125 million. Yet Fitch also published an early warning in 2007 about a complex product known as constant proportion debt obligations, spotting risks its peers did not flag.
Source: Fitch Ratings
