Saturday, January 12, 2008
Fidelity investment's senior debt was downgraded by Moodys
-- Fidelity Investments, the world's largest mutual-fund company, had its long-term senior debt downgraded by Moody's Investors Service because it has lost its``dominating market share.'' --Moody's cut its rating on Boston-based Fidelity, owned by FMR Corp., by one level to A1. The move affects $2.1 billion of notes, Moody's said today in an e-mailed statement. Fidelity'srating outlook was raised to ``stable'' from ``negative,''Moody's said. -- ``FMR's downgrade reflects the loss of the dominating marketshare lead that the company formerly enjoyed over its nearestcompetitors,'' the statement from Moody's said. ``FMR's assetflows have not kept pace with the other major fund complexes andmany costly programs have left the firm with high overhead.'' -- Fidelity had $1.9 billion in deposits in the first 11 monthsof 2007, compared with $70.6 billion for Valley Forge,Pennsylvania-based Vanguard Group and $67.6 billion for Los Angeles-based American Funds, according to Boston-based FinancialResearch Corp. The numbers do not include Fidelity's money-marketfund deposits, which accounted for more than $60 billion as ofNovember, Fidelity said. -- In June, Standard & Poor's cut Fidelity's counterparty credit rating one level to ``AA-/A-1+'' because earnings growth is trailing that of competitors. New York-based S&P raisedFidelity's debt outlook to stable from negative. -- Fidelity, which is closely held, has not released 2007results. Fidelity's 2006 earnings fell for the first time in fouryears to $1.18 billion from $1.33 billion in 2005. Sales rose 16percent to $12.9 billion. Fidelity manages $1.5 trillion inassets.