Two of the top debt-rating agencies, Moody's Investors Service and Standard & Poor's, said Tuesday they are considering ways to respond more quickly, and aggressively, to signs of trouble at the companies they follow.
The focus on improving the timeliness and relevance of corporate-bond ratings comes at a time of rapid-fire downgrades and amid criticism that experts did not alert investors soon enough to the problems brewing at Enron.
Executives at both agencies said the increased frequency of ratings downgrades in recent months is not so much a response to the Enron fiasco as it is a reaction to the poor credit environment created by the country's economic recession.
Nevertheless, Moody's issued a report Tuesday outlining several proposed changes to its rating process; an executive at Standard & Poor's said his company has been engaged in a similar dialogue.
The measures being considered by Moody's include shortening the ratings review period and allowing rating changes to be made without formal reviews "when the relevant facts are known with a reasonable degree of certainty," according to the report.
The report said Moody's has made no formal decisions on these proposals and that the company would seek feedback in the coming weeks from market participants.
Although executives at both Moody's and Standard & Poor's insist the emphasis on timeliness has little to do with Enron, they acknowledge a new push to dig deeper into the complex ways that corporate loans and trading agreements are structured.
Enron has been accused of hiding debt in shadowy partnerships.
Cliff Griep, chief credit officer at S&P, said in addition to making more frequent ratings changes, his company also has begun to take a closer look at how its ratings match up with stock- and bond-market indicators.
"Dramatic price moves may indicate that there's new information in the marketplace," Griep said.