Kunal’s letter highlighted U.S. middle market corporates, ABS, and data – could you please quantify the revenue benefit

March 22, 2024

Revenue related to ratings on structured products including asset-backed securities (ABS), residential mortgage-backed securities, and commercial mortgage-backed securities accounted for just shy of 60% of total Morningstar Credit revenue in 2023; in this group, ABS accounted for a significant share of revenue. Fundamental ratings, which includes middle market corporates, accounted for a little more than 35% of total Morningstar Credit revenue in 2023. Licensed data revenue accounted for the remaining roughly 5% of total revenue in 2023. Revenue related to ABS and corporate ratings (excluding financials) and licensed data increased roughly $12 million in 2023. We do not directly disclose costs by asset class or specific products. 

Across Morningstar Credit, we believe that the keys to success include being timely and responsive to investor requests and needs and providing solid research on the topics that drive these markets. In our data licensing product, it is important to have solid coverage in all relevant sectors. Our expanded coverage in middle-market loans and nontraditional niche ABS (“esoteric” ABS) has allowed us to expand our public ratings coverage, which we believe makes our licensed data products more robust.

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