Wall Street's Private Credit Boom Sparks Concerns

Egan-Jones Ratings Co., a small but influential credit rating agency, has grown rapidly by providing private credit ratings that are widely used in the industry, especially by insurers seeking higher yields. Despite its success, the firm faces scrutiny over the accuracy and potential conflicts of interest in its ratings, which have sometimes been overly optimistic and led to defaults. Regulatory and industry concerns highlight the risks of relying on private, less transparent ratings in a rapidly expanding market, raising questions about the true safety of private credit investments.