Moody’s Affirms A1 Senior Rating for Fidelity

Moody’s Investors Service has affirmed the long-term A1 senior unsecured debt rating for FMR, parent company of Fidelity Investments. Moody’s said that the broad offerings of FMR—including mutual funds, particularly fixed income and money market funds; brokerage services; and benefits administration—and its strong leadership position in each of these industries, should help it weather the economic meltdown.

In particular, Moody’s noted, Fidelity’s share of equity assets under management is an impressive 14%.

Otherwise, Moody’s said, it has a broadly negative outlook on the asset management industry, given the severity of recent market declines. And, Moody’s added, despite Fidelity’s recent layoffs, its EBIDTA will continue to decline in 2009, due to market conditions.

“The rating affirmation with a stable outlook for Fidelity incorporates our view that the company’s business performance is fundamentally sound and that its overall financial profile, while likely to weaken in 2009, can be reasonably maintained within our expectations for the current rating,” said Moody’s Vice President and Senior Credit Officer Matthew Noll.

However, if the equity markets remain depressed for a prolonged period, putting further pressure on Fidelity’s assets under management, margins and debt, Moody’s might lower the rating, Noll said.

The last time Moody’s rated Fidelity’s unsecured debt was Jan. 11, when it was downgraded from Aa3 to A1 with a stable outlook.