According to an article in the Wall Street Journal, in May 2016, “Social Finance Inc., known as SoFi, for the first time received the highest possible credit rating from Moody’s on a new bond deal.”
a. What is Moody’s highest possible credit rating? What information does this rating provide investors?
b. How does Moody’s earn revenue from rating bonds like SoFi’s? Should investors be concerned about how Moody’s earns its revenue from rating bonds? Briefly explain.