(Bloomberg) -- S&P Global Inc. raised its full year profit outlook as its rating agency continues to flourish as companies race to debt markets.
Adjusted earnings this year will be $14.35 to $14.60 per share, the company said in a filing, compared to a prior view of $13.85 to $14.10. A consensus of analyst estimates called for $14.33 per share.
S&P Global’s performance comes after peer Moody’s Corp. reported similarly strong results last week, with both companies riding the wave of corporate debt issuance.
Issuers are capitalizing on robust investor demand and favorable borrowing terms to sell debt at record-setting pace. High-grade bond risk premiums — the added premium over US Treasuries investors get paid to hold riskier debt — are close to levels last seen in 2021 while average bond yields are approaching the lowest since February.
US investment-grade bond sales are running at the fastest pace since 2020, with new issue volume exceeding consensus expectations every month so far this year. Tuesday’s issuers include Netflix Inc. and Citibank NA, the operating company of Citigroup Inc.
The ratings business, which accounted for around 27% of S&P Global’s total revenue in 2023, according to data compiled by Bloomberg, saw sales jump 33% versus the year-ago period, topping analysts’ expectations. The company now expects overall revenue to grow by 8% to 10%, having previously seen 8% at most.
Billed issuance rose 54% in the period, according to the company’s earnings presentation, as issuers reduce near-term maturities in advance of potential volatility in the remainder of the year.
Shares were up about 1% intraday in New York. S&P Global is up 11% this year through Monday’s close, below the 15% of Moody’s, which gets more of its business from debt ratings.
©2024 Bloomberg L.P.
