Who is Egan-Jones?
Egan-Jones is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO) for certain asset classes (Egan-Jones is NOT registered as an NRSRO in respect of issuers of asset-backed securities or issuers of government, municipal or foreign government securities), and certified by both the European Securities and Markets Authority and UK Financial Conduct Authority. Source: Egan-Jones
Egan-Jones Rating Definitions | Egan-Jones Ratings Company
What is a Nationally Recognized Statistical Rating Organization?
- Nationally Recognized Statistical Ratings Organizations (NRSROs) are SEC-recognized credit rating agencies.
- Credit rating agencies are organizations that provide an assessment of the creditworthiness of a company or a financial instrument.
- Ratings agencies also evaluate the creditworthiness of government debt.
- There are currently 10 NRSROs approved by the SEC, although other credit agencies do operate without being NRSROs.
Sources: Investopedia and SEC.gov | SEC Publishes Annual Staff Report on Nationally Recognized Statistical Rating Organizations January 28, 2025
NRSROs and Insurers, including Structured Settlement Annuity Issuers
For insurers, having a higher BBB rating instead of a BB can significantly cut capital requirements and increase returns. Ratings really do matter.
- A. M. Best.
- Standard & Poors
- Moodys
- Fitch
- Egan-Jones
- KBRA
The credit ratings potentially affect access to capital and the rates charged for the capital.
Consider it similar to the scenario where an individual with an 800 personal credit score applies for a credit card, car loan, or mortgage, compared to an applicant with a 600 score on Equifax, Experian, TransUnion, or FICO, when seeking terms for a mortgage, car loan, or home remodeling loan.
Mid-year 2025 Concerns saw ” a growing list of institutional investors-including BlackRock, Carlyle and Apollo-have formally excluded Egan-Jones from their deals”-Guru Focus June 26, 2025
See The $1 Trillion Illusion? How One Tiny Ratings Firm Is Quietly Risk Rules, June 26, 2025 “A 20-person shop is powering the private credit boom — and some of the world’s biggest investors aren’t buying it”.
Some industry insiders point to ratings that are “investment-grade” on paper but feel misaligned with the actual risk.
But a now-withdrawn NAIC report highlighted that firms like Egan-Jones may be assigning grades several notches higher than expected. Meanwhile, recent blowups are testing confidence: Chicken Soup for the Soul, Crown Holdings, and other companies defaulted soon after receiving BBBs from Egan-Jones. Even so, the firm insists its methodology holds up. “Our rated obligations have typically performed better than implied,” Egan-Jones said in a recent statement. Critics remain unconvinced, especially when defaults happen within weeks.
The firm also faces pressure off the balance sheet. A 2022 SEC settlement barred founder Sean Egan from rating decisions and imposed $2 million in penalties over alleged conflicts of interest. Then in 2024, two ex-employees sued, alleging they were fired for questioning internal practices — including pressure to modify ratings. That case is still in court. Despite the noise, Egan-Jones is pushing forward. But with more scrutiny, slower growth, and mounting concerns about systemic risk, investors may need to think harder about the fine print behind those private credit labels — and who’s writing them.
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