Moody’s (MCO) 47th Annual Raymond James Institutional Investor Conference summary

Credit Market Conditions and Outlook

• Credit spreads remain tight at around 300 basis points, expected to normalize to 400–500 basis points by 2025 barring a significant credit recession.

• Opportunistic refinancing is active, with substantial refinancing volumes and M&A activity projected to rise by 25%, especially in data centers and power sectors.

• Downside risks include prolonged geopolitical conflicts and persistent inflation, which could delay rate easing and increase spreads.

• Lower long-term rates could boost issuance of longer-dated bonds, particularly for infrastructure and data centers.

AI and Technology Integration

• AI and agentic tools are enhancing operational efficiency, enabling faster credit analysis and streamlined processing of large debt volumes.

• AI adoption allows the business to handle higher transaction volumes without proportional cost increases.

• Regulatory requirements ensure human judgment remains central in ratings, with ongoing dialogue to maintain compliance as AI adoption grows.

Competitive Positioning and Pricing

• Moody's ratings provide issuers with about 22% savings in coupon costs, supporting strong pricing power.

• Pricing strategies are adapted based on issuer profiles, with frequent issuers potentially receiving tailored pricing.

• Methodological rigor is maintained even if it means losing some structured finance mandates, with innovation in new asset classes like data centers and emerging markets.