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.