Obtaining Press for CSP 's Clients

“NEW YORK (Dow Jones)–Weiss Ratings, a small, independent credit-ratings agency, has carried the debate over the U.S. government’s triple-A credit rating several steps farther than the big Wall Street ratings agencies–consigning the world’s largest economy to near junk-bond status on Thursday. Weiss is a little-known provider of opinions on the health of banking and financial institutions. Still, the firm touts its having predicted the failure of major banks, including Lehman Brothers, in advance of the 2008 financial crisis that paralyzed markets worldwide. Last week, Standard & Poor’s warned that the U.S.’s coveted AAA status could be at risk of downgrade within the next two years. The news reverberated through markets at a time when Washington is embroiled in a pitched battle about raising the debt ceiling and closing the yawning budget deficit. But Weiss–which Thursday assigned the U.S. a “C” rating that lands it squarely in the lower rung of its global sovereigns–argued that the ratings of S&P, Moody’s Investors Service and Fitch are “unfair to investors who are undercompensated for the risks they are taking.” Weiss’s “C” rating is the equivalent of the bottom of S&P’s investment-grade spectrum. Renewing a longstanding debate about large ratings agencies, Weiss contended that these institutions are effectively understating the risks to investors with their ranking systems. “An honest rating is also urgently needed to help support the political compromises and collective sacrifices the U.S. must make in order to restore its finances,” said Martin D. Weiss, president of Weiss Ratings, in a statement. A spokesman for S&P declined to comment. Moody’s didn’t comment, but last week issued a report detailing how it interprets the U.S.’s credit strengths and vulnerabilities. A spokesman for Fitch didn’t immediately return a request seeking comment. According to Weiss’s scale, rankings range from A (excellent) to E (very weak), and it has four major areas that comprise its ratings: debt burdens, international stability, economic health and market acceptance. Based on these criteria, Weiss scores the U.S. at 33rd among 47 nations–lower than Russia, China, Malaysia, Saudi Arabia and South Korea. The ratings agency, which had previously specialized in rating banks and insurers, is expanding into sovereign ratings for the first time, the company said. The C rating assigned to the U.S. “signals that the current fiscal condition of the United States government is far weaker than recognized by the credit rating agencies,” Weiss said in its statement. “At the same time, it means that the U.S. currently retains enough borrowing power in the marketplace to give it the opportunity to take remedial steps. Still, there are grave risks for policymakers and investors, including the possibility of a vicious cycle that includes severe declines in U.S. bond prices and the U.S. dollar,” the firm stated. Bond yields have been relatively stable of late. However, the dollar has plunged to near a three-year low against a basket of major trading partners as investors flee the U.S. currency’s low-yields associated with the Federal Reserve’s ultra-loose monetary policy.”