Credit rating agencies assess the likelihood that an organisation issuing debt will fail to pay back its creditors fully and on time – called ‘going into default’.
Organisations are rated from AAA (virtually guaranteed to pay up on time) through to C (indicating a high risk of default). Risks are classified as ‘investment grade’ if they come in at BBB or above, with anything less known as ‘speculative grade’.
Data providers supply financial markets and media with critical real-time information such as company share prices, exchange rates, research and analytics, and tools and software for tracking portfolios. They also offer financial and business news services.
In the credit rating agency business, Standard & Poor’s and Moody’s each control around 40% of the market. Fitch Ratings and Egan Jones are also significant players. In the market data and analysis industry, Bloomberg and Thomson Reuters remain locked in a battle for top spot – the former had a market share of 30.44% and the latter 30.05% in 2011, according to Burton-Taylor International Consulting. Other key players include Dow Jones/Factiva, Interactive Data, FactSet, SIX-Telekurs and IRESS.
Roles and career paths
Rating agencies usually recruit graduates into data analysis jobs. Trainees typically start in research teams focusing on industry sectors and/or financial products. Fitch has a structured graduate programme. Moody’s and Standard
& Poor’s recruit according to need. Data providers offer a variety of graduate roles, including data analysis, finance, IT and sales.
Pay and bonuses
Graduate trainees within data providers can expect to start on $35k-40k, depending on experience and academic background, according to recruiters. Rating agencies typically pay less at junior level, with the possibility of a small bonus. Further up the ladder, credit analysis roles pay well. After five to seven years, salaries are $90k-120k, according to the Robert Walters salary survey, rising to $120k-150k after seven to 10 years.
Data providers value IT skills, such as Microsoft Excel and Visual Basic, even if the role isn’t related to technology, suggests Helen Chiles, head of EMEA recruitment at Bloomberg. Desirable degree disciplines include mathematics, finance or economics, she adds.
“We look for candidates with an analytical mind who can think strategically about the context in which they are working, articulate complex processes clearly and thrive in a fast-paced environment,” says Chiles. “Good communication skills are critical to building and maintaining client relationships, and languages are an asset as we operate internationally.”
Meanwhile, James Rizzo, senior director, corporate finance, Fitch in the US, says that a “heads-down” work ethic is valued in rating agencies in order to skill up on your particular sector, but this needs to be combined with an ability to get your point across.
“A ratings analyst’s job is unique in that no one person is solely responsible for a rating, so while developing your analytic expertise is important for your career, never underestimate the importance of those ‘softer’ skills such as presenting your ideas clearly to colleagues or writing a concise report,” he says.