MSCI, Moody’s Partner on Risk Assessment Tool for Private Credit
MSCI Inc. and Moody’s Corporation announced a partnership to launch a solution for independent risk assessments of private credit investments. This “first-of-its-kind” platform aims to enhance transparency and support investors’ asset allocation strategies in the rapidly growing private credit market, which lacks standardized risk assessment tools.
The solution integrates MSCI’s private capital database, covering over 2,800 private credit funds and more than 14,000 underlying companies, with Moody’s EDF-X credit risk models. These models provide insights into the financial stability of public and private companies, delivering early warning signals and transparent metrics at the company and facility levels. The resulting proprietary third-party risk assessments will include consistent Probability of Default (PD) scores and Implied Ratings, enabling investors to assess, compare, and communicate risks effectively.
The service, distinct from Moody’s Ratings credit rating agency, addresses the opacity of private credit loans, many of which lack credit ratings. It will streamline due diligence, eliminate manual processes, and provide credible metrics for investors, regulators, and boards. The platform is expected to launch in the fourth quarter of 2025.
Rob Fauber, Moody’s President and CEO, emphasized the need for trusted assessments to benchmark credit risk and inform portfolio decisions. Henry A. Fernandez, MSCI’s Chairman and CEO, highlighted the partnership’s role in meeting the demand for transparency and consistent standards in private credit.
