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Rating agencies in public brawl over scores for private credit

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Rating agencies in public brawl over scores for private credit

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Two US credit rating agencies have become embroiled in a rare public dispute over the reliability of scores for insurance companies’ growing stash of private credit investments.

The dispute involves a study, since withdrawn by its publisher, purporting to find that small credit rating agencies assign more generous scores to private credit investments than the larger and more established ones. Kroll Bond Rating Agency has accused Fitch Ratings of misleading market participants by relying on the study to raise doubts about the quality of its ratings.

Fitch on Monday published a report critical of Kroll and other groups, based on the 2024 study, issued by the National Association of Insurance Commissioners.

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A Fitch spokesperson stood by its report, arguing the insurance commissioner’s group reached similar conclusions in prior studies. “If the (association) provides new information, we will update our analysis.”

The unusually overt quarrel highlights the intense competition in the fast-growing and lucrative $1.6tn private credit industry to carve out turf — not just among lenders, but among the groups paid to referee creditworthiness of the market’s opaque investment offerings.

“There’s a build-up of risk in the insurance industry and also potentially in the collateralised loan sector that is not being properly monitored,” said Ann Rutledge, a former senior Moody’s analyst and now chief executive of rating agency CreditSpectrum. “The opacity and the risk are both attributable to the fact that there are cracks in the foundation of the current SEC-regulated credit rating industry.”

Insurers and other investors use the types of ratings in question, known as private letter ratings, when no public ratings are available. Larger ratings firms historically have eschewed issuing these types of scores for private credit products, leaving the market dominated by smaller agencies.

Private letter investments were “inherently more risky given the lack of transparency and potential ratings inflation”, analysts at JPMorgan said in a recent note, adding “there is an inherent challenge in assessing credit quality from the outside as no part of the process, analysis, or information is transparent from the outside”.

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Kroll, which was among the first to challenge the establishment credit agencies with its launch after the global financial crisis, said it was troubled by its larger rival’s boosting of “statistically unsound” research. It said Fitch’s criticism appeared geared towards supporting its own grab for dominance.

“In seeking relevance to increase its market share in private credit, Fitch appears to have undercut two foundational principles for any rating agency — integrity and analytical rigour,” Kroll said in a statement.

The study by the NAIC focused on the rise of private letter ratings for insurers’ private credit investments, which totalled about $350bn at the end of 2023.

It found confidentially-issued grades from smaller rating shops were more likely to deviate from scores by the association’s own securities valuation office and were notably higher on average. According to the original report, smaller groups such as Kroll tended to offer ratings three notches higher than the association’s internal score, while larger agencies such as Fitch offered ratings about two notches higher.

The study also showed that the number of privately rated securities held by US insurers grew from 2,850 in 2019 to 8,152 in 2023, and that the share of securities rated by small credit rating providers such as Egan-Jones, Kroll and Morningstar had grown to 86 per cent in 2023.

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The report also noted that Fitch is the leading provider of private letter ratings among the big three US rating agencies, ahead of S&P Global Ratings and Moody’s Ratings.

But earlier this month, the insurance association announced it was removing the report from its website “to undergo further editorial work to clarify the analysis presented”.

Without naming names, the insurance association said it would “evaluate how the information we provide to the public could be misconstrued or otherwise utilised in inappropriate ways”.

The NAIC declined a request for comment.

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Trump’s push to end transgender care for young people opposed by pediatricians

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Trump’s push to end transgender care for young people opposed by pediatricians

A display at the Gender Health Program of Children’s Minnesota hospital. Under a proposed rule announced Thursday, a hospital will lose all its Medicaid and Medicare funding if it continues to provide gender-affirming care for trans people under age 18.

Selena Simmons-Duffin/NPR


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Selena Simmons-Duffin/NPR

Dr. Kade Goepferd watched the Trump administration’s moves on Thursday to ban gender-affirming care for transgender youth with “a mix of sadness and frustration.”

Goepferd, who is the founder of Children’s Minnesota Gender Health Program, says that for the medical community, nothing has changed about the evidence supporting gender-affirming care that could justify the government’s actions.

“There’s a massive propaganda and disinformation campaign that is selectively targeting this small population of already vulnerable kids and their families,” Goepferd says.

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“Men are men”

Federal health officials said many times at Thursday’s announcement that their actions were driven by science and evidence, not politics or ideology. They frequently praised a report published by the Department of Health and Human Services in November. It concluded that clinicians who provide medical care to help youth transition have failed their patients and emphasized the benefits of psychotherapy as an alternative.

At times, health officials cast doubt on the idea that a person could be transgender at all.

“Men are men. Men can never become women. Women are women. Women can never become men,” said Acting CDC Director Jim O’Neill. He added that “the blurring of the lines between sexes” represented a “hatred for nature as God designed it.”

Health Secretary Robert F. Kennedy Jr. said doctors and medical groups had “peddled the lie” that these treatments could be good for children, and that those youth were “conditioned to believe that sex can be changed.”

Doctor groups disagree

The American Academy of Pediatrics, the medical group that represents 67,000 pediatricians across the country, pushed back forcefully on those characterizations.

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“These policies and proposals misconstrue the current medical consensus and fail to reflect the realities of pediatric care and the needs of children and families,” said AAP President Dr. Susan J. Kressly in a statement. “These rules help no one, do nothing to address health care costs, and unfairly stigmatize a population of young people.”

AAP’s official position on this medical care is that it is safe and effective for the young people who need it. That view is shared by the American Medical Association, the Endocrine Society, among other medical organizations.

In a statement Thursday, the American Psychological Association wrote: “APA is deeply concerned about recent federal actions that not only challenge the scientific understanding of gender identity but also potentially jeopardize the human rights, psychological health, and well-being of transgender and nonbinary individuals.”

The most significant proposal released by HHS would withhold all Medicare and Medicaid funding from hospitals — a big portion of their budgets — if they provided gender-affirming care to those under age 18.

The Children’s Hospital Association said that rule — if finalized — would set a dangerous precedent. “Today’s proposed conditions make it possible for all kinds of specialized health care treatments to be withheld based on government-mandated rules,” wrote CEO Matthew Cook. “Millions of families could lose access to the care they need.”

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After a 60-day comment period, the rules could be finalized and then take effect.

Attorneys general in New York and California have said they will fight these rules and protect the rights of trans people to get care in their states. The ACLU has vowed to sue, and more legal challenges are expected.

“I don’t want to be lost”

According to a CDC survey, about 3% of teenagers aged 13-17 identify as transgender, approximately 700,000 people. A poll from health research organization KFF found that less than a third of transgender people took medication related to their identity and 16% had had surgery.

For young people, medical options most commonly include puberty blockers and hormones. Surgery is very rare for minors. “This is health care that evolves over time, is individualized, tailored to a patient’s needs, often after years of relationship with a trusted health care team,” says Goepferd.

NPR spoke to a transgender 15-year old in California this week about the moves Trump administration officials were making to restrict care. “They think what I’m feeling is a phase and that my family should just wait it out and that it’s better I’m unhappy and never receive care,” he says. NPR agreed not to name him because of fears for his safety.

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He says it can be difficult for those who are not transgender to understand that experience, but that, as far as he can tell, these health officials “are not interested in understanding trans people.”

He describes the long and deliberate process he made with his parents and doctors before he began taking testosterone. “The decision to not start gender-affirming care is often just as permanent as a decision to start it,” he says. “Not starting [hormone therapy], for some people, it feels like ruining our body, because there are certain changes we can never have.”

Now, after six months on testosterone, he feels like he’s on the right path, and is worried about the prospect of losing access to his medication if HHS’s efforts to shut down care nationally succeed. “It feels like someone’s throwing me into the bush just off the path I’m on, and that’s kind of terrifying,” he says. “I don’t want to be lost. I want to keep going where I’m going.”

“Deep moral distress”

More than half of states already ban gender-affirming care for young people after a frenzy of laws passed since 2021 in Republican-led states. This week, Republicans in the House led efforts to pass two federal bills that would restrict access to care, including one that could put doctors who provide the care in prison for up to ten years. It’s unclear if the bills will be voted on in the Senate.

Although nothing has officially changed in states where the care is still legal, these efforts to enact national restrictions have doctors and health systems in those states bracing for the possibility that their clinics will have to close down.

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Dr. Kade Goepferd is standing in an exam room at Children's Minnesota hospital.

Dr. Kade Goepferd takes care of transgender and gender diverse young people at Children’s Minnesota hospital.
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“There’s a deep moral distress when you know that there is care that you can provide to young people that will measurably improve their health and the quality of their life, and you’re being restricted from doing that,” Goepferd of Children’s Minnesota says. “And there’s a moral distress in feeling like — as a hospital or a health care system — you have to restrict care that you’re providing to one population to remain financially viable to provide health care for other kids.”

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Takeaways from an eventful 2025 election cycle

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Takeaways from an eventful 2025 election cycle

Is there such a thing as an “off year” for U.S. elections? The elections in 2025 were not nearly as all-encompassing as last year’s presidential race, nor as chaotic as what is expected from next year’s midterms. But hundreds of elections were held in dozens of states, including local contests, mayoral races, special congressional elections and two highly anticipated governor’s races.

Many of the elections were seen as early tests of how lasting President Trump’s 2024 gains might be and as a preview of what might happen in 2026.

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Here are five takeaways from the 2025 election cycle.

In Elections Seen as Referendums on Trump, Democrats Won Big

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Democrats did well in nearly all of this year’s elections, continuing a pattern that has played out across off-year elections for the last two decades: The party that wins the White House routinely loses ground in the next round of elections.

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Virginia and New Jersey have historically swung away from the president’s party in governor’s races

The change in the final margin from the presidential election to the next election for governor

Sources: Virginia Department of Elections, N.J. Division of Elections, Dave Leip’s Atlas of U.S. Elections. The New York Times

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Elections in these years are often viewed as referendums on the president’s performance. And Mr. Trump’s approval ratings, after months of holding steady, took a dip in November.

A notable shift came in New Jersey, where the majority-Hispanic townships that swung toward Mr. Trump in 2024 swung back to Democrats in the 2025 governor’s race. That contributed significantly to the victory of Representative Mikie Sherrill, the Democratic candidate, over Jack Ciattarelli, the Trump-backed Republican.

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New Jersey’s majority-Hispanic towns snapped back left in 2025

Each line is a township whose width is sized to the number of votes cast in 2025

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Note: Includes townships where more than 500 votes were cast in 2025. Sources: N.J. county clerks, N.J. Division of Elections, U.S. Census Bureau. The New York Times

The leftward swing was viewed by many political commentators as a reaction to Mr. Trump. If that is the case, it remains to be seen how much of it will carry over into 2026.

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Progressive and Moderate Democrats Are Both Claiming Victories

Democratic strategists continue to debate whether the party should embrace progressive candidates or more moderate ones. And in 2025, the election results had both sides feeling emboldened.

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In New York City, Zohran Mamdani, a democratic socialist who struggled to garner support from the Democratic Party, defeated former Gov. Andrew Cuomo by nine points. A similar story played out in Jersey City, where James Solomon, a progressive, crushed former Gov. James McGreevey of New Jersey in a mayoral runoff. Progressives also prevailed in cities like Detroit and Seattle.

Centrist Democrats, meanwhile, came away with arguably the two biggest wins of the year against Trump-endorsed Republicans. Abigail Spanberger and Ms. Sherrill, both Democrats, outperformed their polling estimates and decisively won the high-profile governor’s races in Virginia and New Jersey.

The debate will continue among Democrats as several 2026 primaries have prominent progressive and moderate candidates going head to head.

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In Texas, Representative Jasmine Crockett, a progressive, entered the primary race for a U.S. Senate seat against the more moderate James Talarico. A similar situation has developed in Maine, where Graham Platner has pitched himself as a more progressive alternative to Janet Mills in the party’s attempt to unseat Senator Susan Collins, a Republican. Other progressives, like Julie Gonzales in Colorado and Brad Lander in New York, are challenging incumbent Democrats in primary races.

A Record 14 Women Will Serve as Governors in 2026

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Virginians elected Ms. Spanberger as their first female governor. In New Jersey, Ms. Sherrill became the second woman to secure the position. Both women significantly outperformed Vice President Kamala Harris’s margins from the 2024 presidential race, improving on her results by almost 10 points.

Female candidates also did well down the ballot. Eileen Higgins will be the first female mayor in Miami after defeating Emilio González, who had the support of Mr. Trump. And, in Seattle, Katie Wilson defeated the incumbent mayor, Bruce Harrell.

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States that will have female governors in 2026

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Source: Center for American Women and Politics at Rutgers University. The New York Times

Come 2026, a record 14 women — 10 Democrats and four Republicans — will serve as governors, with six of them expected to run for re-election next year. (More than a dozen states have yet to elect a female governor.)

In New York, it is likely that both candidates will be women: Representative Elise Stefanik, a Republican, began a campaign last month against the incumbent, Kathy Hochul.

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Special Elections Are Still Very Special (for Democrats)

Despite not flipping any House seats, Democrats outperformed Ms. Harris’s 2024 results in every House special election this cycle. Their wins, however, offer limited insight into what might happen in 2026.

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Special elections, which happen outside of regular election cycles to fill vacated seats, draw fewer voters than those in midterm or presidential years. Special election voters tend to be older and highly engaged politically, and they are more likely to be college educated. That has given Democrats a distinct advantage in recent years, and 2025 was no exception.

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Democrats did well in the 2025 special elections

Democratic candidates in this year’s special congressional elections outperformed Kamala Harris’s 2024 margins.

Sources: Special election results are from The Associated Press, and 2024 presidential margins by congressional district are estimates from The New York Times. The New York Times

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Democratic strength in special elections extended to lower-profile races held this year. In Virginia, Democrats secured 64 out of 100 seats in the House of Delegates. In Georgia, Democrats won two seats on the Georgia Public Service Commission, the first time the party won a non-federal statewide office since 2006. Pennsylvania Democrats swept the major Bucks County contests, electing a Democratic district attorney for the first time. And, in Mississippi, Democrats broke the Republican supermajority in the State Senate.

Odd-Numbered Years Are Still Very Odd (for Election Polls)

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Polling in off-year election cycles is challenging because it’s hard to know who will turn out to vote. This year, the polls significantly overestimated the Republicans in the Virginia and New Jersey governor’s races, which both had particularly high turnout for an off year. In 2021, polls had the opposite problem, as they overestimated Democrats.

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Polls missed in opposite directions in 2021 and 2025

Each dot is a poll from the relevant governor’s election, positioned according to its polling error in the election.

Notes: Chart includes polls fielded in October or November of the election cycle. Polling error refers to the difference between the actual result margin and the poll margin. Sources: Polls from 2025 were collected by The New York Times, and polls from 2021 were collected by the Roper Center for Public Opinion Research and 538. The New York Times

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Polling misses don’t necessarily carry over from cycle to cycle: Despite the leftward bias of the polls in 2021, they performed very well in 2022. After each election, pollsters look at the result and evaluate their performance, and then note where they went wrong. Analysis from groups like the American Association for Public Opinion Research frequently indicates that errors come from an incorrect sense of who shows up to vote. Pollsters then try to adjust for this error in the next election cycle.

The errors of 2025 may prove largely irrelevant, however, as the midterm elections will feature a larger, very different pool of voters with a new set of races, and a new host of lessons for pollsters to learn.

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Off years are weird, and the polling errors they produce often are as well.

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Putin tells news conference that Kremlin’s military goals will be achieved in Ukraine

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Putin tells news conference that Kremlin’s military goals will be achieved in Ukraine

MOSCOW — Russian President Vladimir Putin said Friday that Moscow’s troops were advancing across the battlefield in Ukraine, voicing confidence that the Kremlin’s military goals would be achieved.

Speaking at his highly orchestrated year-end news conference, Putin declared that Russian forces have “fully seized strategic initiative” and would make more gains by the year’s end.

Russia’s larger, better-equipped army has made slow but steady progress in Ukraine in recent months.

The annual live news conference is combined with a nationwide call-in show that offers Russians across the country the opportunity to ask questions of Putin, who has led the country for 25 years. Putin has used it to cement his power and air his views on domestic and global affairs.

This year, observers are watching for Putin’s remarks on Ukraine and the U.S.-backed peace plan there.

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U.S. President Donald Trump has unleashed an extensive diplomatic push to end nearly four years of fighting after Russia sent troops into Ukraine in February 2022, but Washington’s efforts have run into sharply conflicting demands by Moscow and Kyiv.

Putin reaffirmed that Moscow was ready for a peaceful settlement that would address the “root causes” of the conflict, a reference to the Kremlin’s tough conditions for a deal.

Earlier this week, Putin warned this week that Moscow would seek to extend its gains in Ukraine if Kyiv and its Western allies reject the Kremlin’s demands.

The Russian leader wants all the areas in four key regions captured by his forces, as well as the Crimean Peninsula, which was illegally annexed in 2014, to be recognized as Russian territory. He also has insisted that Ukraine withdraw from some areas in eastern Ukraine that Moscow’s forces haven’t captured yet — demands Kyiv has rejected.

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