February 12, 2015 / 2:23 PM / in 3 years

S&P owner McGraw Hill reports loss on $1.5 billion legal charge

(Reuters) - McGraw Hill Financial Inc MHFI.N, parent of Standard & Poor’s ratings agency, reported a quarterly loss, hurt by a $1.5 billion charge related to legal and regulatory settlements.

A view shows the Standard & Poor's building in New York's financial district February 5, 2013. REUTERS/Brendan McDermid

The company’s loss from continuing operations was $1 billion, or $3.71 per share, for the fourth quarter ended Dec. 31, compared with an income of $165 million, or 60 cents per share, a year earlier.

S&P said last week it would pay $1.5 billion to resolve a collection of lawsuits over its ratings on mortgage securities that soured in the run-up to the 2008 financial crisis.

The U.S. Justice Department sued the firm in February 2013, claiming more than $5 billion in losses from S&P-rated securities during the 2007-2009 financial crisis.

The company’s adjusted earnings of 95 cents per share topped analysts’ average estimate of 90 cents, helped by higher demand for corporate ratings, particularly U.S. investment-grade, and public finance ratings.

Revenue from the S&P’s ratings business rose 8 percent to $618 million during the quarter.

The company raised its quarterly dividend to 33 cents per share from 30 cents.

Bond markets globally have been volatile due to plunging oil prices and worries about Greece.

However, high-grade corporate debt offerings in the United States rose 9 percent to $1.1 trillion in 2014, according to Thomson Reuters data.

McGraw Hill forecast 2015 earnings of $4.35-$4.45 per share, above the average analyst estimate of $4.32, according to Thomson Reuters I/B/E/S.

S&P rival Moody’s Corp (MCO.N) reported a better-than-expected quarterly profit last week, driven by strong growth in its analytics business and higher debt issuance in the United States.

Thomson Reuters Corp (TRI.TO) competes with McGraw Hill in providing information related to the financial and commodities markets.

Up to Wednesday’s close, McGraw Hill’s shares had risen 22 percent in past 12 months.

Reporting by Neha Dimri in Bengaluru; Editing by Sriraj Kalluvila

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