Moody's profit rises 66 percent on surge in debt issues

Fri Feb 8, 2013 7:09am EST

Feb 8 (Reuters) - Credit rating agency Moody's Corp, which could face a federal lawsuit tied to pre-crisis ratings, reported a 66 percent jump in quarterly profit as it benefited from a wave of debt issues.

Net income rose to $160.1 million, or 70 cents per share, in the fourth quarter, from $96.2 million, or 43 cents per share, a year earlier.

Revenue rose 33 percent to $754.2 million.

Moody's stock has fallen more than 15 percent since the U.S. government launched a $5 billion civil suit against rival Standard & Poor's and parent McGraw-Hill Companies Inc over mortgage bond ratings tied to the financial crisis.

The U.S. Justice Department and multiple states are discussing suing Moody's for defrauding investors, Reuters reported on Thursday, citing people familiar with the matter, but any such move will likely wait until the lawsuit against S&P is tested in the courts.

Moody's and S&P have long faced criticism from investors, politicians and regulators for assigning high ratings to thousands of subprime and other mortgage securities that quickly turned sour.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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