TEXT-S&P: MSCI ratings unaffectd by loss of Vanguard business
Oct 2 - Standard & Poor's Ratings Services said today that New York City-based MSCI Inc.'s (BB+/Stable/--) announcement that Vanguard will no longer use MSCI's indices does not affect our ratings on MSCI. The loss of the Vanguard business represents approximately $24 million in revenues for MSCI. This announcement does not affect our view of MSCI's ratings or outlook. Although the Vanguard business represents a meaningful loss for MSCI's asset-based fee business, both in revenues and prestige, it is a small part of the overall revenue base (under 3%) and EBITDA (near 5%). Further, MSCI's adjusted leverage, at about 2.3x as of the June quarter, is relatively modest for the ratings and we do not believe that the loss of the Vanguard revenues will affect its "intermediate" financial risk profile nor its "adequate" liquidity profile in the near term. We will continue to monitor future customer attritions but MSCI's "fair" business risk profile remains unchanged.