MCO - Earnings call transcript Q3 2020

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Operator

Good day, everyone, and welcome to the Moody's Corporation Third Quarter 2020 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded. [Operator Instructions]. I would now like to turn the conference over to Shivani Kak, Head of Investor Relations. Please go ahead.

Shivani Kak

you. Thank XXXX. and third us well quarter outlook full everyone, to this as for for Moody's discuss XXXX year thanks morning, on joining teleconference our Good results as I'm Shivani of Kak, Investor Head Relations. results its as well for released Moody's outlook morning, for third XXXX our quarter XXXX. year the full as of This presentation The website at a this are to press earnings and both teleconference ir.moodys.com. accompany release available our on this President morning's Chief will conference Moody's Executive and McDaniel, lead Ray call. Officer, Moody's this making Officer. Chief remarks Kaye, the is Also Financial call morning prepared Mark on

During at call this measures to the our also end adjusted language, a will your attention release be presenting which Please refer for non-GAAP figures. towards release. I the all call, we of referenced press or during to the earnings morning harbor found between adjusted earnings of the safe be our this this tables call filed reconciliation can GAAP. end and

factors call point in media of safe out a would together materially statements. could like quarter the Private are the the XXXX, company, with that Act Towards other statements those Management's may contain maybe report quarterly remarks These, this results to on I Analysis listen-only XX, form in forward-looking our statement available Discussion important our within I on and in the for act, the year ended contained discussed differ with XXXX. for the mode. and the XX, risk website meaning the in filings forward-looking attention of members such direct also morning -- which made to from of actual your the website. SEC Reform Litigation In on today's December to SEC's XXXX, our section Securities report XX-Q on set Form ended on and cause March by XX-K factors the the annual any that the harbor and also accordance forth

plan up December would company, XX retire that the we years and on Ray the XX to years was announced nearly comment President like week. succession CEO. XX, McDaniel will to on over last as Moody's as we Before including with begin, of CEO

We has call will the Moody's his assume Ray's on over Board Board as Ray. the Fauber, will retirement Chairman the pleased are I appointed Officer, the Operating Ray to remain and Chief effective upon successor. of very now role January X. that turn will Rob

Raymond McDaniel

Shivani, and you, morning, Thank good everyone.

Before succession the to I leadership company's we discuss the to minute performance, take plan. another want on just reflect

directors purpose Moody's you It unyielding commitment thank and a interconnected not fellow senior of And serve ensure knowledge Directors, with will CEO. with to quality be employees I will rigor continue on as from Moody's as holding role our has at bring unanimous closely the working trust fairness I'll a will to approval world. I'd of Board company. mentioned, joined together with the Shivani the retiring all. successful an to especially people smooth the Rob a work for privilege their Moody's easy, assume of year. you President As end Fauber I and and the as Leaving Chairman. to of me been at the a well clarity, and and Board, Board, and to while like respect Rob is has love great will we our and such and you transition. job to the now leadership succeed

next future. is take place. that difficult this leader Moody's to transition with chapter. is to years leave, for stronger make right evolution While our achievement in the ever the the of it's his I'm into him needs at well company, before, the customers, company's of XX and positioned knowledge than record of its company to impressive and now deep Rob's ideal this our the combined the during time is for his take confident businesses Moody's the

XXXX, future overseeing innovation corporation. maximize who himself excellent and has to Moody's with champion is think and our for well. confident me And and joining Chief with Since Officer, that, deeply hands. MA has has company. he strategy Rob and people. most leader Rob a shown recently someone let he's the efficiency say and of words. turn am cares and will company the know a to few grown both you MIS about across as strategic as strengths served to the be all number He leadership over collaboration, where continue marketing I as well in our in the and an I results-oriented he Operating Moody's call roles, to in innovative,

Robert Fauber

we're confidence. history solutions continue risk In is ahead. analytical and And it And back Moody's in privilege our thank managing excellence. company's Board and data opportunity. analytics our help his of support, ever, have been success. an important global during forward Under enhancements entire ratings him, It's rapidly and be integrated expanding Ray. Moody's offering its the strengthening Ray's decision-makers Thanks, XX including I very benefited work that's team also act turn to and business, as we believe positioned I this grounded building some in history. Ray. exciting on proud company journey to leverage enormous look technology and the business, international forward, for and call company's that and alongside his an I'm past mentorship Ray We've with tenure, and implemented to the that, the the mentorship He's growth strongest company's to to years. I And standards and research Ray look in and Ray important and over growth with world, insights to got presence data businesses. experienced than and our Yes. with to the I'll have understanding insights focused his leadership, the working growing to him friend. continued over and providing trusted the able we a more changing customers has from the for

Raymond McDaniel

provide quarter move the Mark After performance general to business, we'll employees details further thanks our comment times. provide during our for will update prepared a also congratulations third revised respond on Moody's Kaye gracious then results. for to commend want our on outlook I'll to their happy remarks, quarter work you your Rob, hard and I XXXX. words. financial the third to be our again. And XXXX on these trying on to including now questions. on

were Investor this demands and Analytics the performed in highly and the per Both our earnings and difficult opportunistically their organization refinance debt and exhibiting adjusted delivering we the Your and well, response help of which And positions. active Moody's continue on resiliency credit X% insights of revenue customer easy-to-use share Service service solutions. and our unified environment, Underlying growth fortify solutions. award-winning Moody's to dedication with to from continued fiscal of our despite markets, innovate products, strong benefit for monetary stimulus, integrate diluted of and XX%. focus and Moody's quarter performance increasing cash to customer best-in-class to third relevance achieve looking of issuers products coupled suite growth

diluted adjusted to significantly given outperformance narrowed $XX.XX. year Finally, guidance our raised we've and to EPS range XXXX year-to-date, full our $X.XX

XX% from operating income X%, was revenue Moody's from results. Moody's X% XXXX $XXX total growth quarter third of million year at XX% with the up adjusted period. increased and MIS growth Looking prior MA. from

our outpaced increase of from relatively expenses, revenue adjusted small Solid businesses XXX operating driving expansion. growth X basis operating the in margin points

adjusted quarter XX%. was Third $X.XX diluted of EPS up

remained a reopening rolling on experienced calls, between dichotomy certain of to the economy begin measures. talked this flux in back real COVID-XX year, I've parts we've credit real areas about and resurgent Turning Europe these economy credit cases prior the as and U.S. as the markets. caused The And the to within markets.

the between U.S. lack friction issuance the in actions records indicators November. credit incremental bolstered reached jurisdictions stark in fixed among upcoming M&A largely sheets This implementation in balance stimulus with pipeline geopolitical U.S. escalate investment-grade The increased responses issuers certain debt. the new the of where issuers. the of showed but recovery is mixed the as the of focus opportunistically China and or While rate outcome and in refinanced markets, as the bond contrast of and measures in were to uncertainty Meanwhile, their with quarter, same, new others. third election environment macroeconomic to remained continue on positive

However, the to corporate finance, XXXX MIS' of percentage rated the business which finance contributor approximately The issuance line of increasing quarters left of improvement in on shows signs was activity also was last remained on to by chart floating still a but XX%. X rate MIS' muted strong key I'd in loans corporate comparison more to comparison weak detail showed the year. to debt limited. prior go now in demand into relatively Leverage for like to the total was with issuance as bonds over performance.

infrequent activity right-hand resulted As side this or coming XX% Favorable for sector with increase slide, shown grew on more XX% revenue. to year-over-year. CFG in issuers corporate a in nonfinancial the transaction market the of mix

we purposefully the transaction-based Over have agreements. ourselves towards oriented years, more pricing

time, shows this can see creates over greater Our dynamic strategy and quarter. value positive you data in this that that

issuance main second observed to earlier, in we the quarter. noted I As the trend this were refinancing and the liquidity drivers similar quarter,

refinancing continued and As while took to payments M&A more shareholder activity yields opportunistic related tightened declined, on lag. overall spreads a to top, and

that XX% North is of a was year-to-date have needs years U.S., total, in issuers we approximately over European the quarter, approximately trillion. the year. American XXXX are to Of only next where maturities, driver the the forecast refunding mature greatest the issuance refinancing for this key While increased seen this X $X.X XX% X/X to issuance and of Furthermore, XXXX. in about amount

the shown and of this more some refinancing The that remains investment-grade. issue environment. they think develops. pull fortify economic this a lengthened as where views to how through on depends average portion what of in then of for has outlook activity hand the become represents impact on represent be cash a refinancing future base the which companies extent heavily issuance, robust to operating may maturity until needs seen their confident maturities positions XXXX contingent forward slide Our of The XXXX on to though debt the future we even cash

overall of years compared lower steady year-to-date evidenced spread lengthen due rates a partially by incentivized investment-grade of the is maturity in to nearly been This of higher low XX.X to maturity tightening, was issuers This the to and of yields. effective the pronounced XX% investment-grade the green outcome XX needs bar U.S. in in bonds Specifically, years take the XX.X where XXXX. benchmark chart. average their advantage where XX- to shown XX-year the to as than issuance longer year-to-date light especially quarter of maturities have longer us a Many increase years. dampening left-hand investment-grade medium This have refinancing asked issuance, in term. on average bond was the third would was in the on effect have XX%

the impact relatively muted date follow, to While this trend to has is primary reasons. an important for X been

maturities of substantial due grade the in as limited year-to-date, saw investment-grade average in increase to First, was a X.X medium-term rise in the maturity use the to decrease speculative years bond bonds. maturity to issuance

Second in a significant in in absolute issuance bond and there has an longer-dated been perhaps uptick more to importantly, volume rise investment-grade in the resulted supply, has maturities. while increase X- XX-year

volumes more future than XX%, XX-year compared billion rose investment-grade to as Specifically, than year with maturities to supporting more healthy $XXX needs. year-to-date or issuance full refunding X- by XXXX

our to Turning the an and Stable retention insights the sales, growth sales. continues strong customers retention subscription High partially business environment. reflects both the to solid high overall as our The business onetime of working in during sales despite of together offset project supported environment. resilience, softness challenging in virtual rate in relevance encouraging sales continued to of led The rates, the is Analytics. customer M&A margin, pipeline times. delivering have retention revenue and importance sales recurring especially XX% and demand uncertain force to products, better-than-expected existing Moody's analytics our lines third growth, across successfully solutions for show and quarter. by subscription pipeline to performance the for convert XXXX adapted with for COVID-XX

customers innovation solutions delivering tools emerging that Maintaining and XXXX provide continue We in examine make strong healthy decisions. after with new early we have needs. the By quarter. established sales to requires rates next modules the a retention meet performance with better our busy we mix our year and ensure need and customer we'll sales pipeline the combining months, to ongoing they the outlook winter season provide in our customer products, fourth that we

Leveraging quarter, natural solutions integrated that offer with and together machine sentiment bring solutions. score warning more capabilities our This provides early launched we processing new customers credit-relevant our credit powerful X and language indicators. learning,

their deliver moodys.com. Twenty portfolio from CreditEdge with evaluating the are Seven, pairing incorporated with and flagship customers climate these take Vigeo We Four product credit see and portfolios Similarly, RiskCalc. are that ratings, we've approach also now ESG corporate CreditView, monitor within to capabilities sustainability Eiris able our helps Together, data tool known assets the scoring as potential companies, to them their and metrics for with Using along data this credit credit a deterioration. our products, solution needed and customers providing of holistic a decisions. tools risk to more their credit

portfolio investing of business In investments in the addition are growth Starting current In adjacencies. both recently number also made via the and our about expansion regional acquisitions we we organically, areas. past, And strategic spoken adjacencies. of we've with enhancing to a business our and exciting in priorities business partnerships.

counterparty our acquisition curated and time warning signals make with to and Media Our expands acquisition as to early customers surveillance of help better decisions. as well bolsters real The growing aggregator news screening provide AI-powered our capabilities. KYC ability them Acquire

also have unify combines group as our with strategic facilitate internal ESG the capabilities team and ESG Seven. Moody's in The efforts Four coordinated innovation on creation. as progress well September product initiatives. investments Eiris our made will in and Twenty formation across of We The significant our Solutions Vigeo

with that Moody's will In a through Latin strength plans to market positions Islamic domestic well for stake the of and as agency, align in development domestic China, Argentina support and help as the the the rating Turning recent as analytics global help of expertise finance. MARC, in created strengthens in insights. of Malaysian with Over opportunities Moody's leader team credit innovation identify the to Asia a platform we a The minority expansion on and product build continue Uruguay, economy China's brand local growth markets advancement recently which and We we new markets. into data, opportunities capture in expansion. commercial and with our America, acquired us combines group and Southeast to and strategies MA. ensure understanding our which our regional presence

are now new As engagement to input we we continue our on uphold will customers to working employees provide culture. not are at We're invest in By third our be level also only capabilities excited to in to the results expense-saving also level leveraging our I'll of the to opportunities define looking needs, Mark about to outlook exceptional on of come our their turn we key environment XXXX. of is for workplace internally capabilities, strong over from our but helping we able to customer our execute our have the technological future. to maintaining confident and the Moody's Kaye revised call fulfill our existing service expect. as further details quarter

Mark Kaye

you, Thank Ray.

expense continued earlier, to part demonstrate strong leverage management. As MIS operating disciplined through Ray in mentioned

growth finance global issuers XX% the compared of stemming larger, as finance U.S. positions rose in which their top historically X% quarter's banks corporate due loans opportunistically hindered This due of public, benefited Meanwhile, and prior the to CLOs more a in global issued mostly and lines institutions the more wider in credit as coupon as a outpaced as growth as revenue revenue of increase mix for institutions grew liquidity This XX% of structured and due issuers having activity were weakness we to issuance favorable speculative-grade XX% issued public project XX% increase revenue decrease issuance, revenue activity, receptive CLO subdued, global XX% take heavily largest bank XX%, issuance, financial U.S. infrequent to exhibited the XX% XX% revenue ahead from in supplying finance, In potentially issuance was revenue a activity declined in financial XX% in contributor from refinance corporate a and increase new quarter. bolster business. frequent lack advantage the debt increase despite in to line and infrastructure U.S. The compared in both volatile rates. all-in conditions decline. low to Similarly, creation. favorable spreads XX% new market from a investment-grade to was both mix quarters.

mandates signed uptick approximately issuance resumption the M&A third signs an first-time of XXX high-yield early are through quarter a in in of year-to-date, growth significant and an of operating to ongoing combination revenue our margin by Overall, been expense to expectations. bond which We see ahead and have increased A adjusted discipline in led mandates was of points. basis prior expansion pleased activity. XXX

MA. Moving over to

decision recurring XX% constant-currency uncertainty By underpinned to ballots customers help measure, quarter even power we mix. MA's retention represents basis. important Third Moody's base them their more overall Furthermore, year-over-year, ecosystems, X%, in revenue and revenue up organic an This manage our to understand X% with or of and on total, risk. grew impressive is revenue providing of mid-'XXs rates. times the X% collaborating

chain of compliance on This, Focusing its a on data basis. sales together growing RD&A. customers, your on an suppliers feed business in an knowing grew of helped and X% increase quarter. XX% expand revenue XX% organic or compensation third performance with additional ERS, expense and and lower first products, basis increased in Strong entertainment importance have and The points. research In our MA supply suite adjusted products. and costs. drove X% accruals KYC credit were XXX Within with or with in organic discipline basis. robust partially quarter, as margin lines this through the support the origination travel of insurance conjunction In growth operating growth assessment loan increased the credit and such solutions MA but revenue, from incentive offset revenue

and debt interest to, capital the GDP individuals regarding outlook to on own subject markets and as regulators, of uncertainty, detailed the for pandemic, activity and is year but conditions The economic based governments, from operations foreign in personnel for businesses also by different market macroeconomic Euro release. in materially regarding These impact the as Moody's the and rates, current area, responses These reflects on growth and effects items are exchange rates, capital sectors factors. COVID-XX could in market. liquidity assumptions to currency results assumptions well company's and the of outlook. U.S. as additional geopolitical are the and limited and Turning the guidance. Moody's full the general assumptions earnings differ conditions our XXXX and year XXXX many include, not outlook

foreign currency guidance assumes quarter Our at of rates. end exchange translation

million. British guidance expected $XX U.S. charge the rationalization is announced exchange is the of result $X.XX. costs full million of annualized around million real exit reflects total in previously pretax the assumes the a also to pound third million leases in the Of quarter. for The $XX in recorded restructuring XXXX of incurred this our program to total, Specifically, second euro, for This $X estimated for and the of certain rates to result program expected $XX including $X.XX of million and remainder of to $XX the charges the in to million. be $XX $X to half savings million year, estimated estate

refer full XX For earnings our release. of to guidance, our list Table please of

XXXX for as We to and percent the now anticipate increase prior that compared have most the year range. raised full metrics in single-digit forecast key our revenue guidance Moody's high will

to single-digit our revision XX%. improvement operating that upwardly operating adjusted which The resulting range approximately outpaces guidance of to margin supports in the low XX% now upward expect expenses, percent Our we increase leverage a XX% to in operating in revised of range. our

year quarterly be diluted $XXX to the net ranges EPS interest pandemic. cash and full noted surrounding to is adjusted the cost XX.X%, In to $X.XX narrowed of raised $X.XX both rate respectively. of reaffirming million, has uncertainties to Free and $X.XX $XX.XX. and million to impact tax significantly range to and $X.X XX.X% a The of are diluted $XXX expense effective EPS earnings calls, the full flow approximately billion. a of been We we prior range expected now to guidance

the announce COVID-XX we As buybacks are we careful temporarily year. business. share $XXX on and share of resume for that fourth After of are paused we repurchases to a as approximately repurchases the expect guidance evaluation, providing result, million pleased in quarter, monitored in the effects we to our

XXXX full approximately to by spreads and rise decline XXXX is to with X%, the guidance global XXX assumptions. year U.S. X%. the at year-end. interest U.S. respectively. high-yield Our basis to GDP by and rate underpinned default U.S. unemployment area rate following euro year The macro X% rates approximately to approximately end Benchmark stay to points high-yield low of X% and the approximately

We both activity monitor market backdrop the macroeconomic quarter. head continue the to credit as fourth closely into and we

Turning segments. to the operating

now in investment-grade a we XX%, XX% prior loan year assumes MIS, XX%, activity XX%. For High-yield rated revenue our year up with from MIS from for double-digit issuance with our XX%, increases high issuance low Constructed in up of issuance year-to-date, full prior the to than range growing Bank teens. the the percent anticipate the XX%, guidance up assumption from X%. decline. surging issuance increases declined full of expectation declines decline. slightly issuance XX% higher a increase

the million Additionally, full in we range $XXX first-time million. from approximately increase with our mandates expectation $XXX third in have million $XXX quarter, to the of to year raised a

mandates first-time us to MIS' only reminder, a enabling but fees. annual revenue of As future not issuance incremental also through generate monitoring future through integral growth, an part are

[indiscernible] already to we we done during positive anticipate of fourth the that pull-forward earlier we Given the have to XXXX the activity likely remain so. on will activity compared in refinance majority of a discussed, believe relatively we're Furthermore, in trend M&A, limited issuers that that liquidity year, the have contingent looking although that quarter.

margin. to MIS' operating Turning adjusted

full XXXX points quarters With expense raising guidance year to are inclusive of incentive to growth mid-single-digit the outperform over We our growth management approximately year-to-date XX%. revenue we continuing is percent compensation X XX accruals. percentage of growth range. guidance both by also by are in disciplined in pleased to consecutive driven MA, This revenue reaffirm our and

the percentage divestiture RDC, Acquire by impact growth targeted Media. including X acquisitions, and reflects net unfavorable of points FX, guidance Our partially and MAKS ABS a from of RiskFirst, offset approximately from Suite

solutions from as in as continued KYC software research feeds. IFRS the and and is approximately lendings XX operating private XX% Similarly, leverage by initiatives. and in focused growth driven growth subscription-based product quarter a transition gain, the solutions revenue of guidance to operating reaffirmed RD&A lending margin well such and and in expense ERS as driven steady XXXX. strength expect compliance ongoing by fourth analytics management We data support created MA's to adjusted scalable by

call I to to few Ray, key highlight a over would back the like takeaways. turning Before

we First, are of demand to the for suite to full raise and Moody's solutions. products, pleased the metrics in quarter, performance third by high guidance insights better-than-expected due for driven the award-winning year

to and meet Second, reinvest enhance our for positioning we and continued innovate in our Moody's business to evolving long-term relevance customers' sustainable needs, success. further our

increasingly Third, all complex remain in of we to this committed environment, our stakeholders.

designed thoughtful I've thank to the environment deep approach to Fauber's and Ray as financial and call Rob guidance back allocation and working Moody's, the enjoyed management, also the ensure over appointment operational the and personally knowledge with also and with want ongoing learning over workplace turn him. Our I incoming capital and of businesses several leadership, needs to President from years. his expense sincerely that, given And excited am to let flexibility. me of of for his his of and CEO impressive record prudent friendship Ray. customers. energized our our thoroughly past our future and I is by achievement

Raymond McDaniel

our you, Mark. Thank This prepared concludes remarks.

answer would might happy any Mark Kay and be to questions have. Rob you I Fauber, that So

we this up So please, can operator, for open if questions.

Operator

Suisse. Crédit [Operator first Kevin McVeigh And Instructions]. we'll from of hear

Kevin McVeigh

for I results. on you of Ray, Moody's go all really margins and on, nice really it's to Rob, and good Rob wanted in work well Analytics, Ray, top, It's around but as to really set just a there. with hard really, lot a start the you, just improvement. to tough Congratulations good bar

a terms you if forward? help drove going what is and out little it how us of that in wondering sustainable it could frame bit Just

Mark Kaye

continued expansion you noting Thank the margin before over for And context, the a the X basis directly, I question we thought, that worth Moody's result on in for XXX very past it's over question. points impressive a had Analytics years, I perhaps trend. address of

over reported points basis MA quarter expansion. this driven third the that XXX by margin of XX.X% quarter. specifically, to was core basis by For the expanded primarily And points XXX

of points quarter. ERS trips And XXX during basis of so that. and being that RD&A I about that And part around compensation by basis maybe think was in XXX the offset points incentive being

margin in a XXXX have do segment the We to maintained long may XX impact, but see points of basis expansion and XX We COVID-XX trailing guidance over continued our do ultimate some economic very next over depending approximately We XXXX. severity on margin XXX XX-month the expect business. That of on ongoing basis term. margin about pressure MA the XX%. represents the months, expansion from feel of this positive duration we

Kevin McVeigh

like a some with bankruptcies nice And just great. in retention better, then That's terms of just Maybe and really what's really, MA really client outcome. of then takes a little Mark, context maybe environment that puts anything a XX% because context losses, as bit almost that, of driving really, well, that? And ultimately, impressive. this even seems within around the the in within really rate

Raymond McDaniel

Yes. address to Rob, want that? you did

Robert Fauber

has remained across retention overall rate the very say, Yes, MA, strong. sure. Yes, as you

very, ticked research strong. very led In retention fact, slightly. XX% by there, and up probably our products That's

think really of uncertainty, expertise that I an in environment our we're able the to value you're seeing them. offer customers really, is and what insights

So But I businesses. think and that's you rates ERS BvD retention. supporting see the in also retention our the

are on as have must-have that think webcast. that these into of solutions. to kind embedded goes the customer And We and workflows the fact I that viewed

all of regulatory ERS origination, are accounting, capital used So when about you think reporting, solutions, sorts loan these things. being of suite for the

supports just data retention again, compliance supports those really solutions, those rates. rates. like that And a the that which support with retention is lot BvD, So of to being used

Raymond McDaniel

also. your at beginning the Thank you comments Kevin, you, and thank for

Operator

Manav from hear we'll Next, Barclays. Patnaik of

Manav Patnaik

Ray Rob And my and congratulations as to both well.

your going had maybe some in depends they that Or in some a to after particularly issuance on of lot act. high-yield they we in saw try and companies do be of could needed? just markets of you IG investment-grade the that another terms ask to there's surge cash first of how the raised us about lockdowns, the if quarter. was you I in sense, what think of fourth see a the volatility, Clearly, coming? moving lot have should around The there's anticipate think of that surprised some issuance to what the set to pieces, question of you lockdown, repeat that election kind and was the wanted But think I first do a

Mark Kaye

and start done different from bit your any maybe up get do Manav, by it we've little and question, that. and follow-on further next this the hearing we'll really from I'll in share of Mark is today, from what open I given about the what what for talking is we're the think off questions banks I'll And then nature past. a

So the banks looking U.S. tight low advantage historically rates opportunistic investment-grade. have driven by with which issuers was spreads to seen in and of quarter. take third the issuance, starting The increasingly record

facilitated reserves monetary build liquidity to responses Our and fiscal have in uncertainty. case continue stability markets of but companies

As a maturities business portion contingent this last balances used as will upon have it XXXX The the to result, the be fundamentals cash two near-term environment. of while deployed a future that the operating normalize, fund in surged quarters. over the be majority cash view banks likely as debt may

and and a also ESG sustainability in XX-year issuance. have bond banks interest seen the bond in notable Specifically, longer durations increase strong

slow the funding banks necessary For activity companies have their the year, the will the believe year. that of remainder many as completed for

has And pipeline or and M&A continue type been take of to returned. issuance may some favorable M&A-related date, spreads. significantly to muted. low looks advantage then However, activity relatively rates The

view course, investment-grade fiscal indications bottoming. continue uncertainty issuance M&A may to given They've tenant the and to to occurrence stimulus, up are full on election and volumes rates, be their market. the Further rising around the XX% that are for trials, there results to infection, for be vaccine timing XX% year. weigh of going of However,

expected grade. U.S. driven investment-grade XXXX spec been to And as full on year-to-date the to slow and lagged issuance active XX the demand. leverage bond CLO last tightening The the passed volume Moving for high-yield loan yearly the the backdrop of and well high-yield as year, high-yield is Similar and issuance to years. totals weak issuance bond has spreads. that rates record the the Conversely, market, technical year has low and by formation in quarter. slowing issuance bond fourth leverage low a for remainder of has loan

Given uncertainty election week's that of wave the and, second ahead a needs were potential obviously, cases. most next of COVID-XX refinancing funded for

our Turning demand spread and COVID-XX to about investor continued with recovering spike to European have before Bank's the of investment-grade Central their investment-grade. support and spreads strong of narrowing, Despite pandemic. cases, recent XX% the levels

the around Our with Reverse U.S. with and XXXX more muted favorable down due corporate of XX% that's remains in year-to-date, volumes ESG label rates issuance this Yankee than bond bonds. to continues ESG issuance to in the XX% increase issuance

has finally, bank's year, issuance cost the up be of by for relatively investor to European the spec and forward monetary leveraged the returning been fiscal more For well issuance X%. This previous as European And for supported policies investment-grade with proactive healthy, full remain then has investments. similarly high-risk pipeline demand looking as allowed to than months. market finance the full grade, robust

caused of by that that, to And volatility there obviously, with October may a there questions. any if pause in election. be further so And far, busy the U.S. has see also are me let anticipation month, been

Manav Patnaik

more. maybe me. Okay. with digest follow-up a that have I to just But guess, I'll

could for Just competitive if on like the frame business, there what that help U.S.? the means looks KYC also perhaps tuck-ins coming more just here there could and be you many landscape

Raymond McDaniel

for I Rob, think Yes. this is you.

Robert Fauber

also be color provide that. maybe a seeing you happy I do space. kind on in the KYC is little And we're take what Yes. bit what might I'd of to of Manav,

interesting against got there's So the position like in players others. leading a competing know, Refinitiv, Dun in you We're & number KYC as we've and LexisNexis, of some trends on space. a But going market. that Bradstreet

think external us and actually and in-house. stuff very really a accelerated doing old-fashioned look that to for transformation compliance vendors filters KYC solutions that bank way quite time, better made recently and first all challenging. of are entities. And and for use technology individuals And and looking their the have COVID's customer digital they doing they're large lockdowns for first, I are more this legal a pushing what and Companies onboarding. KYC ways had than the their in we tell what to teams and data focus leverage teams when So at precise

this And some wrong, happens in see only the get stuff of not improves can control. the you billions. be reliability banks when the efficiency, automation also and what these headlines brings fines quality So market, these in but

this it's to ever to before. evolve And continues than companies develop their more regulation in space. requiring second know customers and about The

offenses So nature number expand of the for. you've screened got new and regulations that that must be

like So more around RDC we've reputational platforms further adverse And enhanced need and sophisticated social of risks with got media for customers risk, to our things screen we Acquired which that, like in to monitor acquisition be Media. risk, cybercrime, tax crime, what issues. like environmental with able

about excited we're So very that.

third that solutions. thing more the is crime more And sophisticated. that financial more getting and think I is requires intelligent

again, So in can a can these and just but where understand data own get of exposure, customers' institutions understanding from you've merging their customers. increasingly risk internal RDC, not BvD to our data with got hierarchy and customers to their deeper risk that's entity banks' their we're than own. institutions And their we trying external give and to on

new So on really to these existing we're positions that us providing sources insights really is insights with analytics competitive in market some focused content of landscape. in and that providing areas we well and best-in-class smarter think trusted really solutions, and the new offering of

Raymond McDaniel

much very just in firms and demonstrate are add standard are knowing -- area. I or or be is approach real the we X to quickly would I'll customers wanting a committees And of to Using in Boards to And yes, others. that to taking able regulators risk valuable Directors a standard robust that this their they very a their demonstrating robustness. their that

as our in networking So add position. effect a that positive to just

Operator

of from Toni hear Kaplan we'll Stanley. Morgan Next,

Toni Kaplan

XXXX -- out XXXX on on point Rob, Ray, weeks, with the the help there's scenarios. issuance on you and congrats And give in new on the the retirement. at year to color congrats like issuance I don't your the earlier all and And know call, forward role. the preliminary on just the this next stimulus thoughts of But moving pieces and few and preliminary -- in your but us potentially election. lot a

competitors I think down forecasting three. about issuance closest your at

one. hoping take over if you'll or just on the understand So under to that

Robert Fauber

hey, take XXXX. I and wishes. of just the XXXX, think, uncertain, Toni, that, the well appreciate balance like I'll remains

going we're do. our quarter call fourth as earnings guidance the on to going -- give noted, like we you we're give So normally to

important particular, to I year, I be in issuance. starting have XXXX how outlook. think of see in together to then real drop-off in Because going some too, guess, issuance elections, where I general, pent-up and X, this going for terms demand we in we've importantly, year, for off from investment-grade a in sit tailwinds. probably that's tough And right corporate see XXXX be in issuance obviously issuance, ends material now, the say, would issuance. including very it's the because and we strong very had our after XXXX. that very We And issuance to outweigh may headwinds this factor pulling the creates a some in I think very I'm comps years. particular, and

growth a more terms see webcast along We've companies think like in Sustained Central see of walls next showed of means about the areas around and I stimulus. in we year, could next rating And M&A supporting activity. our factors One, certainly activity an growth M&A quarter. potentially service things. to few I and this with improving rate with those going we In an distressed in And maybe of that think the economic works refinancing that's that Bank's we sponsor-driven increase kind assessment of obviously, supportive activity be that deck. potential continued round past highlight uptick another into low may activity. that year. And obviously, thinking a maturity M&A some environment going in seen I'd support, for the

up Various We think issuance liquidity like ongoing that structured to parts Then low the hard in public base versus see that finance. very lot finance which, we year, we've against seen investment-grade, act of to with, a said, could talked very a elevated a this issuers. XXXX. And at rates. very I a U.S. particularly infrastructure weigh said, we starting we've be as of That's I could loans taking elevated improvement about headwinds. of advantage we see and follow. an low off bank potential And XX% expect this we the issuance in of around year.

terms sentiment balance Mark going companies recovery to investment think corporate That and addition, virus likely the thinking. in trajectory That's unfolds. and management. the And or then in heard pay how any impact issuance is the next depending to I wildcard. are on obviously You of consumer potential what down the of both sheet that either a debt, defer year economic for from cash-rich banks raises in

assure you today, firm can you gives into provide a our I that view hopefully, So some thinking insight but quarter. we'll next

Toni Kaplan

MIS then XQ returning strong Very I And on quarter-over-quarter there's costs incredibly an lockdowns, helpful. would And et expected have margins, cetera. following the acceleration.

comp, And so just so has maybe increase incentive issuance a continued in been given strong.

savings, some more bit margins return? just maybe of reductions So little COVID-related versus some maybe the talk the a strength MIS of the temporary and in more about eventually could permanent parse out

Mark Kaye

Toni, afternoon. good

basis You're that. strong this points drivers around period up there were margins very was X result compared underlying absolutely quarter very to MIS year. strong. to XX.X% XXX correct. And The last were the same

second we strong throughout strong the very obviously, cost performance, And first was quarter. showed The revenue the very that the was quarter. in discipline

in automation that, good MIS, there's increased taking restructuring, of obviously, into the temporary be of utilization the variety estate believe think items and cost quarter, lower a And the will I or activities team the through locations that factors. then what around permanent efficiencies, quarters. Then the a carry real that of As looked could within includes we at we and optimization. potential is procurement through portion related management a future

adequately the want stopped hand, make expertise. to sure right that sufficient other On with we we are the and do

that definitely back of into are to going created there the we so And to this use business. the leverage we're reinvest quarter, elements

So that XXXX. puts us for views up in stable

Operator

with we'll from UBS. Alex Kramm hear Next,

Alexander Kramm

Or lot look rates? -- picture, some on when guess, I thing near-term business color. I Is you bullish the the where mentioned loan rate about year, comeback there a just what -- and factors the other XXXX, Rob, provided that though, in business of particular? a ask, appreciate you year? just why easy it next about makes are thinking that I XXXX, you bit actually very One more But other year. that I having business nice we business reasons should could in comps make next be that at a little would loan next had about

Raymond McDaniel

loans, able With to forces think lower the closings we more we have the as respect have of to whether borrowers credit been second are that in a the to particular, acknowledge are I of susceptible have at economy strength wave continuum, recovery, that of such, of open. the generally, parts end and that Yes. the and pace to

So interdependencies. what's say again, play economy or off happening particularly of politically, sensitive what's broadly, this whole -- loan would in is positive between set more happening interdependencies there's and really they the each other. of I And disease the developments a with the market and of both happening negative around that set what's to

to So helpful to question. that's your hopefully, getting

Alexander Kramm

continue issuance over to X% last issues the that pace? I think it Yes. -- No, the it Also, of well, assume that the sorry Is just you I that everybody had if think. one but cited the of and I'm the then 'XX, you've right? revenues, again, when at side that's and hopes about think this MIS -- be couple here. we thinking to And I year-to-date, the year that monitoring over, strong about given a XXXX quick years. already recurring to that fair. think I is to that So grown the over, business, But me, fair you appreciate will think recurring strong fees

Raymond McDaniel

Yes. Rob, want sorry. do you to that? I'm take

Robert Fauber

Yes. we've Alex, second revenue mean, rate of a Yes. little slowdown in so. of the I recurring I saw obviously, that growth we the quarter. had bit think from

X%. to I contributed it is what's typically, -- like think pricing ongoing something initiatives. that's And was that

that think remains intact. I

little obviously, of first-time has, in while height that mandates kind back pandemic up. lower of we're had a we picked the know, you the As bit

seeing in will we're that that improvement continue support growth I a what So mandates looks like rate now. think something to

Alexander Kramm

also ahead. And go Very -- good. Okay.

Raymond McDaniel

get do in year. I quickly, mandates that real be year this the on year. brought Those just mandates Alex, first-time mandates than of first-time to wanted last growth somewhat higher -- the the we in we just number to add, this mind for board will keep first-time related

you're to there's So that will growth. we have to a just I to continue though bit make of sure even model able headwind, a correctly. want

Alexander Kramm

congrats also the again, guess, to here. semiretirement then And and Take care. all from enjoy, roles new I Absolutely.

Raymond McDaniel

you. Thank

Operator

Judah JPMorgan. of Sokel

Judah Sokel

Ray also to echo just you, messages Rob. I'll and those both congratulatory

continuing to work guys. great with the Looking you forward

ask to couple of free cash about wanted Just questions a flow.

in and disconnect a expense touched a a generally, has free maybe bit help have the been little taken up, It will strong guidance that cost You on cash things a up obviously, taking was bit seems flow. conversion seems EPS, management a that slippage, while that like little there of cash it bit little more. from flow to of EPS free and like

can the for the timing into rationale you also that? touch about what's there? going the So just getting and maybe thought guys then the touch for And back on on you on repurchase amount just How restarting share program.

Mark Kaye

question. Thanks the for

me on first flow. cash start question free the with Let

raised XX%. is behind full to on And we midpoints, and that year both headwinds we the flow expecting year really And we XX%. And mentioned grow approximately And you're disconnect those cash approximately XX% are cash working flow for morning, this really due that to driver adjusted grow this approximately to EPS numerical our full by year. simply that adjusted free based guidance So our EPS our earlier highlighting. the the primary that's year. free capital

and to use cash, an to obviously full program, invest are plan sheet. and quarter pleased strong caution. very flow changed I to not think to not On paid to have remain upfront obviously, why payments then this in balance in of amount are and growth long-term comp year we to year. growing earlier out we abundance to our share your question your our ongoing adjust us share that we'll those We're incentive continue out just funding, adjusted And We around cash under for question available the working state now? of we capital very forecast close that share we be capital-allocation $XXX pension feel a around second of if million, EPS much XXXX early shareholders And to recommencing our year me market to look to our decisions. our repurchase we've are term, to we year-to-date. we financial income guiding repurchases first of debt dividend August, So very going got I'd growth refinancing retirement several this approach of this XXXX did for in to the successful environment. other -- a And strategic XXX% to clear optimize repurchases, announce we steps And approximately XXXX changed free After important in very excess our any our means really flow specifically, to for robust cash obviously it's sort that with pathway use this to expected And the this were QX conditions growth. year items, pull I'm opportunistically is year. year ensure plan of repurchase available stress subject earlier that higher capital And capital very that by free around allocation. take XXXX. continuing this that our we've for in cash and which, the CapEx. our performance that return is terms to comfortable then and with of simply net add very conversion for line our shares. Longer we were

Operator

Huber of Partners. Huber Research Craig

Craig Huber

to last as fabulous I here XX in well, congratulations want say job I just as Rob, done well. the years. you've Ray, a think

there if be in think a friend. my for it, was of CEOs, fame there I out hall you'd

Raymond McDaniel

that. Craig, Thank I you, appreciate

Craig Huber

think, cetera, that of mean after implications there, what think on more the may could out years Ray, Rob do high of as there. there's in as put sweeping It's everything potentially guess, Democrats What I here, bar of a here. et put in the you a that well a you've wave the corporations, blue people for Rob, potential obviously the that about team higher place? election you taxes in That's and think a true. here, for coming lot I be consumer regulations think issuance as debt and the for place we that

Raymond McDaniel

the recognize will I'll there's But whether of a well point, are to to Rob business starting and blue be which add just hold there's policies presidency, government. administrations as of whether identical of elements win, the maybe we'll a we've and wave the Democratic there might and So said, that done as as very number policy that That being well as produce win combinations, not Senate, the depending none Republicans to we a start, set same Craig, want priorities going and and priorities, or other well. on address Republican exactly as both unified in have in divided on.

in about what ways, to and is priorities our think of the managing of we that a in usefully. So able terms business, think we'll policy what do accommodating are I own lot be

information. I pandemic our as the markets in think data view, we very period this -- during been having particularly force constructive are a with analytics

whichever will have And we so a way I'm goes business. pretty that this successful optimistic,

be in is devil And the debt Now there. what issuance, of going his couple to a on thoughts details over to that means this of I'll the Rob in terms this. pass for

Robert Fauber

interesting [Technical Difficulty]. to the tax getting Yes, this just Craig, ago lowering were rates. because it's converse with And that really we the years is questions of a corporate recall few the

Raymond McDaniel

Sorry, we lost Rob.

years the because in that some in ago, with a lot happens tax deductibility, just anticipated have rates, not had terms immaterial be so at yes, interest what either And of the what sector compared I the cases, municipal been of discuss that or accelerated in was when fact margin. pretty it and effect Rob parts host a cases, but debt we of debt, what ended were prefunding up, step a of about the just some was let speculation being the in there looking for details questioning municipal of to in caused of few that me did case think rates But lower means lower shields, really issuance issuance. other to at to going

on like it the for the probably and be but will cliché, debt devil the And beyond. drivers a in details in sounds XXXX so issuance of terms again,

Craig Huber

other My Ray. question,

weak environment, of issuance the interest historically for of next that the in debt issuance, et economies Why it's over significantly debt the XX, and your XX next on this the M&A year given not picking virus assuming under that Your keep control, months, outlook, what's U.S., very gets there obviously pick M&A. can here rate part XX-plus cetera, here, months? out M&A the importance thoughts up this over, say, up Europe given

Raymond McDaniel

Yes. pipelines We've M&A an in seen uptick recently. just

of back flunk And the quarter the so that Kansas. up signs had is getting second we showing off in

actually it debt M&A-driven a in fairly could flavors. over This I'm trigger. in think going to is to are more to recovery of cetera, issuance recovery, case -- to to beachheads economic couple businesses through optimistic be the that about rapid about And next that are the different be if Even I pull pivoting could happen, secure inclined stronger attractive how firms take which looking So months. distressed are be to be have are reasonably XX and increasingly slow, XX and a to to doesn't adjacencies, and distressed, there thinking you'll the grow et recovery M&A market, firms a and going going strong activity. inorganic

which XXXX couple year. a have of environment a not eventuate. this can sure going in I'm promising But M&A pathways see path more is So to I than to we

Craig Huber

it's just year-to-date. If please incentive for I could would comp the quarter, Mark, also you on if done how the number ask,

Mark Kaye

for quarter compensation $XX incentive the million. third The was Sure. at

compensation year for and are of per quarter $XX We will be million million $XXX the the to $XXX full of the $XXX against expecting compare or year, guidance that initial million for to the approximately year. beginning around now incentive million at full the

Operator

BMO Capital Jeff of from Markets. Silber question Next

Jeffrey Silber

know add Rob, had Ray, years. pretty know question I I decline, congratulations. at over, just me about? your you over for previous XXXX XXXX is guidance math let you margin couple And adverse in to to single-digit you Or want have we just quarter but decremental MIS, again of implying that Is do left, that If it's thought guidance. to best a I Ray, wishes but so a low I look And thank going the about there a ask off? my should was some we months all help the want for and implied revenue that your think, the on XQ spending I impact. my

Mark Kaye

Your is correct. math

fourth in for imply mid-single-digit or low of quarter, Specifically, on sort the in end increase side revenue. single low would decline -- a digits expenses. a low MIS would our expense sort high low the double-digit -- guidance imply high of the single-digit And of

really the expected infrastructure now I better comp, business be ramp And if costs automation, support about the other to to from contributions. as associated that's efficiency and Specifically, innovation, expense as to in first fourth really around growth. $XX investments think technology specifically, incentive then related to ongoing enable with quarter, the well that's to our really million, charitable

hope So you that color on your little bit gave of a I question.

Jeffrey Silber

appreciate companies I just your you a there? questions more doing have different investors, of company bit And strategy of to Yes, just gears is lot what shifting Can that's actually us Mark. little from planning lot what strategies. a on doing it. very a helpful, that over or on give We're your is an ESG. getting color

Raymond McDaniel

want Sure. it Rob, you off? do kick to

Robert Fauber

happy Yes, take I'd to be that.

ways think into considerations ESG the I ratings We've the and it. ratings you ESG. ongoing really is X about got business our to think and relevance research. that's we're to thinking to want that One thought about ensure might integrating And important really, leadership.

also business I our commercialized with MA. in eventually think see research that you'll be

base that got offerings content into financial who various broad climate integrated insurance corporates, need we for of have to risk-management have companies, an we've ESG increasing MA, demand customer and be banks, of Speaking the a today. institutions, and

there think So it's testing. origination, loan are climate whether about if now you stress

related scores our commercial estate risk to started climate imagine Seven. from real You where our platform, Four put Twenty physical we've can to

solutions integration good Four businesses see and think MA our into climate group. a a bit I with an together products and content that ESG climate ESG lastly, through our So of of put ESG and stand-alone recently And Twenty got and and We existing services. Eiris new you'll Seven. commercialization and we've then all Vigeo

and you'll investors and others. But we've financial so selling think develop those as also to year-to-date. second-party offerings We're through issuer-paid And to see the are around thousands and done on and an we've the we us we labeled Eiris -- got scores institutions of world. I there, are thousands companies we start got sustainability finance on sustainable and developing issuance. there, we've rating opinion bond rating, Vigeo of a for issuers. those a And close And XX have to

started green in market. has It the this bond So moved.

on. all labeled and sorts bonds, green bonds, bonds of Now social issuance, bonds, there's so blue transition

same on note And providing starting thing. second-party opinions that Vigeo are also so to through Eiris. we're issuance I'd affiliates our do that the

mandate. So and our a in bond its CCXI gotten first Korea has just offering green has assessment affiliate

this be And see ESG variety think us get have don't maybe point you'll I ways. because indices. on to going So able lot, are indexes a a through of to you monetize index question obviously how a We business. scaled last we this monetize one

And so what partner is providers doing with their other to working we're index to the power to indices. data them provide

Sole of interesting providers with. that launched We energy a Euronext we example a so index X index around partner recently very are that just Euronext, And Active with transition. good

that monetize different a think you'll way. index in I see opportunity So us

Operator

Williams, Jake Securities. Wells Fargo

Jake Williams

is question congratulations wanted as how synergies are And discussion was along business. RDC trending? of you related an both level those I I pass provide margin to kind on RDC. in could any to and absolute around to if the update our well. And the wondering Robert Ray maybe My

Robert Fauber

to. be Yes, changing... We're happy take I'll that. I'd

Raymond McDaniel

the know just call. first this to is or Jake, believe I I time to wanted Rob. Sorry, your welcome you on.

turn So I say just want and to welcome. now. Rob substance I'll to the hello over

Robert Fauber

in about I that feel group these portfolio. with trends seeing Look, good in market. a earlier with And talking about appreciate people business, BvD. RDC was combination good that. fit we're KYC the MA the super of a really the great and I we a It's

So think I was this a timely acquisition.

wins to successful. We've would tangible sales sales compliance RDC between I released without next this combination. month. focused we've And seen, initial nor year, going So program have an closed that a our has We've far on that, really this that's been some be offering integrated RDC. joint neither phase BvD BvD think, I of and think, got

acquisition and our specifically Acquire we've Media, a got the that's capabilities, of that And integrations in then further our milestone offerings. with strengthens of key the RDC. product So

business In subscription a benefits to revenue how than our a and So due and the going the as is warning that enhance some performing, growth. have offerings Acquire early to engine we credit that an with it's going to to build to new coming very Moody's expectations had year news leverage further as to aggregation to signal their And KYC well Media slightly AI-driven ESG actually important regards overall. offerings. that's into from be supplier to maybe are opportunity RDC our better sophisticated standpoint the momentum

may that's same by sales we've a really But Our overall distancing. had behind bit current be social little just challenges expectations. caused the

I So much very think issue. a temporary that's

Operator

Shlomo Rosenbaum of Stifel.

Shlomo Rosenbaum

Rob, to put be congratulate also, to out to I'm going you he does that tell Ray seem little I young want but pasture. to a do

Raymond McDaniel

I don't feel young.

Shlomo Rosenbaum

more growth, of in Well, of that Are is the you funnel XX% of is these pickup seem seeing you are sales a over going you some on a really much to to the retention. strong it RD&A. you, questions versus Are want there. strength out west that how or just new ask organic I energetic Or bit strength -- just color is the sales calls. There as like little in of calling the just well? there

Robert Fauber

Yes.

we're But yes, not out any thanks put Ray means. pasture to being So the -- well for not is wishes. by

sell we're And RD&A get growth compliance customers both seen and into is, serve feeds, in platform to deployment drivers this So touched of credit I I nice more customers. it's bit existing at really things in new good we've research, price-related maybe but growth. to view XX% data primary actually growth to and existing the logos, in broader really some use In growth from range and business. sales We That a did organic little remarkably these around the upgrades cases XX slightly product that think, strong good And also yield the from of a over as I X KYC interesting. sense, good a that a months. seeing, this BvD RDC dollar space. retention feeds give our And figure. course, that on driving about the these we think up last research revenue in on to solutions RDC, research demand low that ongoing data KYC base of the feeds. In bit. BvD, To is constant That's enhanced then, what's BvD, was heard really organic talked teens rates. there's it's data there's and us, you've quarter. solutions, I've you the think And

Shlomo Rosenbaum

what the term? Or just about the that situation how encounter saw this just main that, because confluence that? investors in that you're then and we XXXX, of And we If one near strength that's like, focus Or drove issuance the maybe of year-over-year on you when just we to the have margins the year-over-year, hopefully of for up way where heightened you nature kind the is thinking levers this with opening of of Okay. more in in. terms go the manage be in is have we in of just should of that an together weaker can something And something and will hey, business, Mark. dealing business? are the a the the philosophically, that people that in is the with like -- ahead year, and much creeping traveling go fact more in the you expenses down manage margins? general What economy

Mark Kaye

Yes, idea the a those will basis. year as a regular some Shlomo, that implementing the that the Maybe to you the that it's team infer actions talking interesting that through of could a way and fairly financial management it now. by expense we've taken I'll think one are need address flexibility carry to on And very question, is and create XXXX it's this with I we firm. certainly about that through the

percentage strongly low If single-digit a here MCO, MCO quarter. this demonstrating revenue just carry that operating X% that growth that the quarter see against And then year, growth to the we're full guidance against again for For our did itself, expenses. how see single-digit our and maybe is you you high adjusted X% I for that's growth for the early revenue signal, against managing an was can number. expense forward that

absorbing year cetera. example, and comp, self-funding of bit sort same higher our for that the are a cetera. incentive this despite support million related, activities, business core business of the expenses if expenses to activity, managing underlying down forward And into into to XXXX, through $XXX that carries And little et procurement real expense cetera. to those be investments discipline growth, to strategic IT travel reinvestment like that's entertainment, then further promotion those million COVID-XX, activities, full M&A I idea $XX core cultural that's achieve estate, to targeting forward carry savings down expenses ESG, and to the some debt with manage reserves, So of the theme again, efficiency, KYC, around, achieved bad from year. back and that self-fund, we some going et we're of to between going And et

create base thinking how So little gives around our bit color of flexibility financial in a of it XXXX. we're to think you managing expense that I

Operator

from George Tong hear Goldman of we'll Next, Sachs.

George Tong

great missed. the be congrats Congrats will on you a new run. And role. Ray, Rob, on

Raymond McDaniel

you. Thank

George Tong

with of focused So your MIS. more which Can on in you're to you mix within about talk your And you process? you categories are this increase noted this change? transaction-based expect that continuing where of you be debt pricing to

Raymond McDaniel

Yes.

to I to on pay do of is have lot additional not that transactional so it's more we the I say continuing, the issuers a George. would from grade be trend in. we have be growth noting the the pushing issuers, Rob, that, Mark, percentage or start, will that be just I'll thoughts. a in a time is a coming inclined basis. But target terms those speculative tend and that seeing But less So that may And direction over ratio weigh mix. recurring Rob much in really believe to and between frequent and going we and of transaction If transaction. please are we're

Robert Fauber

exactly add that's to think really Nothing I Ray. that. Yes, to right,

Raymond McDaniel

Yes.

Okay.

George Tong

investment-grade expect especially high-yield to we And in mix looking it. high-yield year, rate then saw the the you Got the That's strong of and between issuance helpful. quarter? third would Okay. change, the the how forward of issuance of remainder to given

Raymond McDaniel

Yes. Rob?

Robert Fauber

this conducive see support. finance buyer elections, small when it, consecutive seen be I be the market, like strong now. we're leveraged recently, I'd markets flows because deals, of even something and seeing and be XX conditions the some right uptick given into Yes, aggressive and take you let of happen inflows, had are kind market, seeing very of and section that's continues investment-grade continue up some, happy a that that. in secondary corresponded earnings markets. very, doesn't stimulus. relatively investment-grade strong. to some fed call to in very similar I'd we Maybe Meanwhile, dividend to issuance. We equity loan the that -- in recaps, to the market the It's kind we would what year-to-date, provides to interesting that's just usually equity activity. leverage been And about to kind we've But the of with impacting headlines volatility. how me until note talk that investment-grade LBOs, weeks are funds an We've has

and to And in But strength that trying of election-related weighted of of I to there for we that year. year. So The I for balance some are leverage activity talked ahead is the to just to say thing going issuance end get little the the the of fewer we're has windows see finance. issuance a about, think volatility. activity with the are holidays, there we the the of fewer we're remainder been -- slow think bit see seeing I upcoming the the may just would and issuers as last

Operator

Next, Oppenheimer. we'll hear of Owen from Lau

Owen Lau

congratulations on of Rob, duties. first the well-deserved congratulations Ray, on your career all, promotion. also So And successful

doing this in So had room I you my flow If want year. above go back Is past cash question, for XX% buybacks. that my to where correctly, math and dividend to I'm targeted XX% share to any is there in repurchases is the free more be share trading? total given the and of aggressive,

Mark Kaye

we the is an free for propose that's to set Owen, BBB+ a rating. best target our XXX% We anchoring. that approximately question. years, return. I when flow DOJ income over adjusting for This earlier call, XXXX, to over number on several manage We percentage it, to and way on cash conversion you XXXX our capital free don't the targets the thank to said, the flow as XXX%. with Maybe With slightly has XXX% the be expect, the with settlement. of year, been net mentioned an we around don't phrase based really past of specifically actually cash anchoring really that or

free In has million. through $XXX and year-to-date, has been terms carry around then of million hypothetically repurchases around to the If that we the approximately would guidance at $XXX expectation would billion dividends XX% put the forward of share approximately earlier, of about dividend the our year-end, about which share roughly and $XXX million year-to-date spoke flow cash rate been dividends for million we $X.X $XXX repurchase be guidance.

correct are absolutely there. You

Owen Lau

quarter. finally, it. that please particular, going in reason projects I Got in loan provide could quarter of more of credit Okay. forward? why these IFRS origination third you then And XX. sustainability you Maybe strength? think on a strong the the and also mentioned it ERS, for ERS color had happened the assessment, And solutions and pretty And the

Raymond McDaniel

Rob?

Robert Fauber

RiskFirst. And IFRS insurance we sales I'll wins of Overall, been on credit growth strong supported has solutions Yes. touch this. solutions. said, and ERS as and obviously, by,

as for to cycle our contribute we've good XX north like sales XX% seen, And very subscription we've that something our year-to-date products, assessment around of sunset credit fact, -- kind been that origination that. software. those as the has a in So origination we one -- driven growth renewal well. But to again, of And seen of CreditLens that's, credit of origination continues by year-over-year. IFRS

Operator

Atlantic Simon Clinch of Equities.

Simon Clinch

targeting? you wondering market for to kind beyond on the acquired, KYC you're just that there currently was the are opportunity with the just terms and of KYC that data wanted you sort ancillary opportunities have of natural just the you've follow-up assets of any in business data have. And I that I the use sets of

Robert Fauber

Good question. Yes.

business go you you've regulation, got at little I beyond serving talk addition So think to in heard institutions just we're a earlier financial simply And data going broadening bit want that. is things issues better beyond, understanding crime of to likely like security, like the who have doing about, of me a risk, what who reputational slavery for institutions. also things increasing with. to KYC requirements And instance, social to financial regulatory around into see modern and they're

think I case. talked what for think data in about this a addition to So before, chain may start use calls kind drivers is, start understand we've of means customers for supply I to risks to on know-your-supplier that at to see -- KYC, of their we look kind --

going you're think to over broaden this I So see time.

Simon Clinch

as regulatory of just terms there compliance other Interesting. are tech there tech, Okay. areas of in well? opportunities And within or sort any

Robert Fauber

So instance, Is our going beyond, KYC for offering? that...

Simon Clinch

This Yes, within one KYC. the space tech beyond market. of regulatory [indiscernible]

Robert Fauber

is. It

I shown think drivers we've accounting MA our for that regulatory the business. before broadly, more broader and

products fill regulatory not different just things a both regulation, opportunities well existing that but Basel, requirements around whole for I think of things as these there's evolve. testing, the as demand a of meet range product and calculations, gaps kinds solvency, capital of they So driving as us to more host of stress more for whole regulatory MA are to KYC

Simon Clinch

That's I Great. follow-up maybe interesting. you ESG the if had comments Okay. before. on And just could

I lot monetization you the Just of have, existing process would -- those were ultimately across just today. time? that in I'm the a develop how that opportunities would become decade, of of using terms over thinking will all data different And investors of part we those think and that you because next the over companies companies that -- and imagine ESG have

just curious how So of view what today? monetize I opportunity as to to beyond have you kind was you that that

Robert Fauber

great Yes, question.

good, standards I there real think around So right? on there's XBRL, disclosure what the will I hard as will value data getting But time, is right that's is through are really the insights. is be become in And high-quality more commoditized. -- data, as which data. valuable think, itself, over eventually at requirements, It's automation is there the right. what you're get, to now

second-party part evolve. the I talked industry you're going and about of sustainability I see to So think opinions. the ratings

to to of to pickup of every this And financial them Bank think going grow long We're going offerings, they're their company comply nonfinancial I their have up into talked to climate, term. the going monitoring in integrating going to I you're stress demand to is portfolios. is that seeing bank stress then be in about going like over a institution, So to think there. the earlier, I they're medium right? and seeing into talked ESG, about see, risk-management these to I with are insurance the testing. England already climate really thinking banks integration world content that. platforms, test risks, We're have origination about with and be a to have

content do scale So to don't going my that I And think financial big you're through the see have risk-management around of big to risk-assessment index point the but monetization business indexes, we a scaled serving a we institutions. ESG back business, have segment.

Operator

today. over for I'd our And question-and-answer call this comments. that the At closing additional session like McDaniel time, Ray concludes back for turn to to

Raymond McDaniel

by And you. to way, welcome Thank as I Okay. Simon, the to call forgot the well. you

the ending gratitude employees. before So our to would call, my reiterate I like to

support have calls me. also amaze over like these thank earnings I'd of resilience, dedication, really joined you Your on the to who all years.

had. interactions and of XXrd of who've will I journey, think be appreciate the I the we've those this been much my for very along all or some you for

enjoy you, the I'll months. and two everybody, thank last So

Operator

Earnings XXXX This concludes Third Quarter Call. Conference Moody's

IR this As third the under company reminder, the breakdown will the MIS immediately revenue homepage. the call, earnings following section XXXX a post quarter of Moody's

Additionally, replay X:XX Thank Eastern call of a IR be this on Moody's p.m. after website. time available will you.

disconnect. You may now

Moody's (MCO) 30 Oct 202020 Q3 Earnings call transcript