Source:
The Wall Street JournalStandard & Poor's Corp. officials held private meetings with large bond investors weeks before the firm's historic U.S. debt downgrade, leaving some believing the chance of a credit-rating cut was higher than they previously thought.
Though S&P had put the U.S. on "credit watch" in mid-July, some investors were skeptical that S&P would actually strip the U.S. of its triple-A rating, maintained since 1941. S&P said in a news release on July 14 that "there is at least a one-in-two likelihood that we could lower" the U.S. ratings within 90 days.
In the following weeks, S&P officials visited large bond firms including Allianz SE's Pacific Investment Management Co., Los Angeles-based TCW Group Inc., Legg Mason Inc.'s Western Asset Management and New York asset-management giant BlackRock Inc., according to people who either attended the meetings or were briefed on them afterward. Some of these investors say they came away with a stronger sense the nation's debt rating would be cut.
At the meeting with Western Asset Management on July 20, S&P officials noted that "70 to 75% of the countries that are put on watchlist for downgrade, get downgraded," said Stephen Walsh, Western Asset's chief investment officer, who was briefed on the gathering. He said Western Asset officials "came out unambiguous that the odds were much higher than 50-50."
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http://online.wsj.com/article/SB10001424053111903648204576554642014670986.html
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