Fitch Ratings

The country's largest public pension fund, the California Public Employees' Retirement System, has dropped a lawsuit against Fitch Ratings without receiving any monetary settlement. The 2009 lawsuit in San Francisco County Superior Court accused Fitch and two other credit rating firms, Moody's Investors Service and Standard & Poor's Corp., of negligently misrepresenting the financial strength of three so-called structured investment vehicles the companies rated. CalPERS sank more than $1 billion into the three investment funds, which held mainly mortgage-backed securities and were hit with large losses after the U.S. economy began to collapse in 2007.

WASHINGTON -- The Justice Department plans to file a civil lawsuit against Standard & Poor's for its ratings of mortgage-related investments leading up to the financial crisis, the company said Monday. The suit focuses on S&P's ratings in 2007 of some collateralized debt obligations, or CDOs -- securities that pool bonds and other assets, the company said. Such a suit "would be entirely without factual or legal merit," S&P said. "It would disregard the central facts that S&P reviewed the same subprime mortgage data as the rest of the market - including U.S. government officials who in 2007 publicly stated that problems in the subprime market appeared to be contained - and that every CDO that DOJ has cited to us also independently received the same rating from another rating agency," S&P said.

WASHINGTON -- Fitch Ratings said that there would be "no fiscal honeymoon" for President Obama, warning early Wednesday that the U.S. probably would lose its AAA credit rating if the White House and Congress don't address looming tax increases, spending cuts and the fast-approaching debt ceiling. "The economic policy challenge facing the president is to put in place a credible deficit-reduction plan necessary to underpin economic recovery and confidence in the full faith and credit of the U.S.," said Fitch, one of the three major credit rating companies.

WASHINGTON - A failure by Congress to raise the debt limit "in a timely manner" could lead to a downgrade of the nation's AAA credit rating, Fitch Ratings said Tuesday. Republicans want major government spending cuts in exchange for a debt-limit increase. But Fitch, one of three major credit-rating companies, said the debt ceiling should not be used to force a deficit-reduction plan. "In Fitch's opinion, the debt ceiling is an ineffective and potentially dangerous mechanism for enforcing fiscal discipline," the company said.

Fitch Ratings cut Spain's long-term issuer rating three notches to BBB from A, putting it two levels above junk. The ratings agency also set a negative outlook for the struggling country, citing worries about contagion from Greece and doubts about the Spanish government's ability to take strong action to shore up its banks without international support, given its “high level of foreign indebtedness.” The banking sector could require 60...

WASHINGTON — Without the unprecedented stimulus actions by the federal government triggered by the 2008 financial crisis, the Great Recession might still be going on, according to a study by Fitch Ratings. Those incentives, however, came with a price: accelerated budget deficits and rock-bottom interest rates that hurt savers, according to the credit rating company. Still, the $700-billion bailout fund, the $831-billion stimulus package and the Federal Reserve's near-zero interest rates, among other federal efforts, continue to spur the nation's economy, the study released Wednesday concludes.

SACRAMENTO - California has made "notable progress" improving the state government's financial health since the economic downturn, according to Fitch Ratings, a New York debt-rating service. In a statement Wednesday, Fitch praised the state for winning approval of two tax increase initiatives last month and for making significant spending cuts over the last several years. But the firm noted that the state still has room to improve. "The state's fiscal recovery is incomplete and challenges remain, but continued economic improvement, a demonstrated commitment to more sustainable budgetary operations and progress on reducing budgetary debt would be viewed positively by Fitch," said Doug Offerman, a senior director.

WASHINGTON -- Moody's Investors Service  warned Wednesday that the "fiscal cliff" tax deal was not enough to remove the risk of a downgrade of the U.S. credit rating. The company, one of three major credit rating firms, said the deal approved Tuesday night to raise about $620 billion in tax revenue over the next 10 years was "a further step in clarifying the medium-term deficit and debt trajectory of the federal government. " But the package, which averted income tax increases on most Americans, did not produce "meaningful improvement" in the ratio of the federal government's debt to its economic output.

* Executive search firm Korn/Ferry International of Los Angeles said it had agreed to buy Lominger Ltd. of Minneapolis for $24 million in cash, adding recruiting, assessment and training materials for businesses. * Xerox Corp. won an investment-grade credit rating as Fitch Ratings raised its recommendation.

General Motors Corp.'s debt rating was cut another level below investment grade by Fitch Ratings, which cited concern about whether the automaker had done enough to reduce its North American operating costs and end losses. GM's rating was reduced to B from B-plus, Fitch said. The rating, now five levels below investment grade, has a negative outlook, meaning Fitch may downgrade GM again.

WASHINGTON -- Moody's Investors Service  warned Wednesday that the "fiscal cliff" tax deal was not enough to remove the risk of a downgrade of the U.S. credit rating. The company, one of three major credit rating firms, said the deal approved Tuesday night to raise about $620 billion in tax revenue over the next 10 years was "a further step in clarifying the medium-term deficit and debt trajectory of the federal government. " But the package, which averted income tax increases on most Americans, did not produce "meaningful improvement" in the ratio of the federal government's debt to its economic output.

SACRAMENTO - California has made "notable progress" improving the state government's financial health since the economic downturn, according to Fitch Ratings, a New York debt-rating service. In a statement Wednesday, Fitch praised the state for winning approval of two tax increase initiatives last month and for making significant spending cuts over the last several years. But the firm noted that the state still has room to improve. "The state's fiscal recovery is incomplete and challenges remain, but continued economic improvement, a demonstrated commitment to more sustainable budgetary operations and progress on reducing budgetary debt would be viewed positively by Fitch," said Doug Offerman, a senior director.

SACRAMENTO -- California has made "notable progress" in improving the state government's financial health since the recession and the economic crisis of 2008 and 2009, according to Fitch Ratings. The New York debt-rating service issued a statement Wednesday praising the state for winning approval of two tax increase initiatives last month and for making significant spending cuts over the last several years. "The state's fiscal recovery is incomplete and challenges remain, but continued economic improvement, a demonstrated commitment to more sustainable budgetary operations and progress on reducing budgetary debt would be viewed positively by Fitch," said Doug Offerman, a senior director.

Credit-rating companies in the United States are beset by shortcomings, failing to act quickly enough to issue downgrades and not properly documenting ratings decisions, the Securities and Exchange Commission said in a report. The SEC said Thursday that the country's largest credit-rating firms — Standard & Poor's Corp., Moody's Investors Service and Fitch Ratings — did not follow their own policies in issuing ratings and failed to accurately document their decisions. This was the second report the SEC has issued about ratings firms, a responsibility the agency inherited under the Dodd-Frank financial reform act. The report evaluated the performance of rating companies from August 2010 through September 2011.

WASHINGTON -- Fitch Ratings said that there would be "no fiscal honeymoon" for President Obama, warning early Wednesday that the U.S. probably would lose its AAA credit rating if the White House and Congress don't address looming tax increases, spending cuts and the fast-approaching debt ceiling. "The economic policy challenge facing the president is to put in place a credible deficit-reduction plan necessary to underpin economic recovery and confidence in the full faith and credit of the U.S.," said Fitch, one of the three major credit rating companies.

WASHINGTON — Moody's Investor Services warned that it probably would downgrade the Aaa credit rating of the U.S. if government officials don't deal with the nation's debt problems. The credit rating firm said negotiations between Congress and the White House on the nation's 2013 budget and a decision on reducing the high ratio of debt to gross domestic product will be key to acting on its top credit rating. "If those negotiations lead to specific policies that produce a stabilization and then downward trend in the ratio of federal debt to GDP over the medium term, the rating will likely be affirmed and the outlook returned to stable," Moody's said.

Shares of Xerox Corp. fell after the company cut its profit forecast nearly 80% on restructuring costs and slowing technology spending. First-quarter profit will be 3 to 5 cents a share, down from an earlier forecast of 16 to 20 cents, Xerox said. Standard & Poor's and Fitch Ratings both revised their outlook for the Norwalk, Conn., company to negative, reflecting challenging economic conditions. Xerox shares fell $1, or 19%, to $4.34.