Moody's boosts payouts ahead of earnings slowdown Moody's, the second largest credit rating agency by number of ratings, raised its payouts to shareholders to cushion an expected slowdown in earnings later this year. Despite posting better than forecast results for the second quarter on Wednesday, the company declined to raise its full-year guidance and told investors that revenue in one part of its business would go into reverse. Earnings have been boosted over the past two years by a surge in the number of companies taking advantage of low interest rates to issue debt, and by the revival in the US of the structured finance market after a post-credit crisis hiatus. However, the Federal Reserve's plan to reduce its programme of quantitative easing has sent market interest rates higher and caused some issuers to rethink their plans. Moody's said it no longer expected structured finance revenue this year to be flat, and it would instead show a single-digit percentage decline, with continuing contraction in Europe and a slowdown in the US. It did increase full-year revenue guidance for ratings on corporate bond issuance, reflecting the stronger second-quarter figures. Overall earnings for the quarter came in at $1 per share, ahead of the consensus of 90 cents. The company reported net income of $225.5m, up 31 per cent on the same period last year, on revenues that were up 18 per cent to $756m. The strongest growth in the quarter came from corporate bond issuance, including investment grade and junk bonds and loans, where revenues rose 28 per cent in the US and 52 per cent in the rest of the world. Raymond McDaniel, chief executive, said Moody's would double the size of its share buyback programme this year, to $1bn, and also increase its dividend by 25 per cent. The company made 71 per cent of its quarterly revenue from rating corporate and municipal bonds, bank debt and structured finance products, where issuers pay for its assessment of their creditworthiness. Its other business, Moody's Analytics, provides research for investors. Its revenues rose 10 per cent to $219m.