Egan-Jones Rating Company
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| Private company | |
| Industry | Financial services |
| Founded | 1995 |
| Founder | Sean Egan & Bruce Jones |
| Headquarters | Haverford, Pennsylvania, United States |
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Area served
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Global |
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Key people
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Sean Egan & Bruce Jones |
| Website | www.egan-jones.com |
 Sean Egan on Potential SEC Charges, CNBC
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Egan-Jones Ratings Company, also known as EJR, was founded in 1995 and actively rates the credit worthiness of approximately 2000+ high yield and high grade U.S. corporate debt issuers. Egan-Jones positions itself as unique among nationally recognized statistical rating organizations (NRSROs) for being wholly investor-supported, a structure designed to minimize the potential for conflicts of interest in assessing credit quality.
The firm was granted NRSRO status on December 21, 2007, making it the ninth such organization to be recognized by the SEC.
The effectiveness of Egan-Jones' investor-supported credit ratings has been measured by third parties, including Richard D. Johnson of the Kansas City Federal Reserve, the Stanford University Business School and the University of Michigan's Business School.
Sean Egan, principal of Egan-Jones Rating, appeared before Congress on October 22, 2008 and argued that issuers of complex securities "shopped" for ratings which resulted in a race to the bottom in terms of credit transparency. Rather than "beat up Moody's and S&P for behavior" they'd been financially motivated to pursue, the government needs to support a new business model paid for by investors, not issuers, to support the funding ecosystem which has so severely broken down, he asserted. Egan-Jones on July 16, 2011, became the first NRSRO to cut its rating on the United States from AAA to AA+. On April 5, 2012, Egan-Jones downgraded the credit ranking of the United States for the second time (and within one year) from AA+ (Excellent) to AA (Very Good) assuming that the debt will reach $16.7 trillion by the end of 2012 while the GDP will not grow further $15.7 trillion limit and the debt to the GDP ratio will reach 112% of the national GDP which is the highest level since the WW II. On September 14, 2012, Egan-Jones downgraded the credit rating of the United States for the third time from AA to AA-, the lowest of what is considered "high grade", as a reaction to QE3.
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