Egan-Jones Ratings
Independent credit rating agency using an investor-pays model, focused on private credit and CLOs.
On the record
Checkpoint: SEC decision on restoring NRSRO status for asset-backed and government securities
The call
Egan-Jones holds a rare license that keeps AI and the Big Three out of its lane, but regulators and a former insider are testing whether that license survives.
Egan-Jones rates bonds and other debt by charging the investors who buy them, not the companies issuing them. Most competitors charge the issuing companies instead, which Egan-Jones says creates bias. The company's advantage is hard to copy because regulators must approve bond raters, and switching payment models requires regulatory permission that big competitors cannot easily get. However, a former Egan-Jones executive just started a rival firm in late 2025 with inside knowledge of how Egan-Jones works, positioning itself as cleaner and targeting the same investors. The company's entire survival depends on regulators approving its license again in August 2026 and resolving questions about whether its independence actually works in practice; if regulators decide investor-paid models are not trustworthy, or if the new competitor gains real clients, Egan-Jones loses its only edge.
Why
01
AI pressure: None apparent. AI tools could speed up credit analysis for rivals, but AI cannot get NRSRO registration or replace regulatory trust. Could AI do the core job? Only partly.
02
Bigger players: Michael Brawer's new private-credit rating firm. Former Egan-Jones risk chief launched a rival firm in Dec 2025 with insider knowledge and a clean image pitch. Could a giant copy it? Probably.
03
What protects it. Its investor-pays NRSRO license lets it rate deals the issuer-pays Big Three cannot touch the same way.
What would change this call
SEC's August 12, 2026 decision on Egan-Jones's NRSRO expansion for ABS and government securities. denial would confirm regulators are curbing Egan-Jones's licensed scope.
Outcome of SEC's integrity inquiry into private-credit ratings and the Brawer whistleblower suit discovery. adverse findings would signal reputational and regulatory damage to trust moat.
Whether Egan-Jones's CLO transaction count keeps falling below 1,633 and whether Brawer's firm signs named clients. continued decline plus client wins for Brawer would show real customer defection.
Outcome of SEC's integrity inquiry into private-credit ratings and the Brawer whistleblower suit discovery. adverse findings would signal reputational and regulatory damage to trust moat.
Whether Egan-Jones's CLO transaction count keeps falling below 1,633 and whether Brawer's firm signs named clients. continued decline plus client wins for Brawer would show real customer defection.
Key numbers
- CLO coverage fell from 1,823 to 1,633 deals
- Rated about 2,900 private debt deals
- Around 26 analysts covering ratings
Named risks
- SEC could deny Egan-Jones' NRSRO expansion for ABS and government securities by Aug 12, 2026.
- Active SEC inquiry into private-credit ratings integrity and conflicts of interest, reported Jan 2026.
- Whistleblower lawsuit (Brawer et al) in SDNY could surface damaging discovery findings.
- CLO transaction coverage declined from 1,823 to 1,633 over 18 months through June 2026.
- Insider-founded rival firm (Brawer) could poach clients or analysts from same niche.
Rivals, as read in July 2026
| Rival | Direction | Evidence |
|---|---|---|
| Michael Brawer's private-credit rating firm | contesting | Ex-Egan-Jones CRO launched rival firm Dec 17, 2025, using insider knowledge |
| KBRA (Kroll Bond Rating Agency) | contesting | KBRA active in same private-credit niche, per Dec 2025 industry report |
| Morningstar DBRS | contesting | Named among peers expanding into private-credit ratings, Dec 2025 |
| S&P Global, Moody's, Fitch (Big Three) | losing to | Big Three hold ~95% of overall ratings market as of Nov 2025 |
Questions people ask
- Is Egan-Jones Ratings profitable in 2026?
- Egan-Jones does not publicly disclose revenue or profit figures. It is privately owned by founder Sean Egan with no external investors reported, and no company-issued financial statements were found as of mid-2026, so profitability cannot be confirmed from public sources.
- Could AI replace Egan-Jones Ratings?
- Egan-Jones' ratio-based analysis and CLO monitoring reports are quantitative and rules-based, making the workflow plausibly automatable, per November 2025 industry commentary. But its SEC/ESMA/FCA NRSRO licensing confers regulatory capital-treatment weight that unlicensed AI outputs cannot replicate as of 2026.
- Who is Egan-Jones Ratings' biggest competitive threat?
- Michael Brawer, Egan-Jones' former Chief Risk Officer and a whistleblower plaintiff against the firm, launched a competing private-credit rating firm in December 2025, marketed with insider knowledge of Egan-Jones and a 'truly clean' positioning, per Bloomberg reporting.
- Is Egan-Jones Ratings losing its SEC license?
- Not yet, but it's contested. Egan-Jones lost ABS and government-securities NRSRO status in 2013 and reapplied in October 2025. The SEC opened a formal review in March 2026 with a decision due August 12, 2026, and separately denied an exemptive-relief request on March 24, 2026.
- Who owns Egan-Jones Ratings?
- Egan-Jones is privately owned and controlled by founder Sean Egan, who remains CEO, founder and president as of June 2026. There are no disclosed external investors, funding rounds, or ownership changes reported for the firm.
- How big is Egan-Jones Ratings compared to Moody's or S&P?
- Egan-Jones is a small niche player. S&P Global, Moody's, and Fitch together control roughly 95% of the overall credit ratings market as of November 2025, while Egan-Jones focuses on private placement and unsolicited investor-pays ratings, a much smaller segment.
Timeline
- 2026-07-09Egan-Jones publishes investor report on AI competitive dynamics
- 2026-07-08Egan-Jones reports CLO coverage at 1,633 deals, down from 1,823 in Jan 2025
- 2026-03-24SEC denies Egan-Jones' exemptive-relief request under Rule 17g-5
- 2026-03-23SEC opens formal review of NRSRO expansion bid, decision due Aug 12, 2026
- 2026-01-27Egan-Jones hosts second annual Private Credit Conference, ~300 attendees
- 2026-01Active SEC inquiry into private-credit ratings integrity reported
- 2025-12-17Ex-CRO Michael Brawer launches rival private-credit rating firm
- 2025-10Egan-Jones applies to regain NRSRO status for ABS and government securities
- 2025-09-29Brawer whistleblower lawsuit against Egan-Jones active in SDNY, discovery ongoing
- 2007-12-21Egan-Jones receives NRSRO status from SEC as ninth firm recognized
Revision history
21 July 2026
First assessed. Losing its protection. The text above is fixed as of this date and is not edited afterwards.
In the same band
Sources
- Egan-Jones Ratings Company (2026-06-10)
- Egan-Jones: Things to Know
- Products, Competitors, Financials, Employees, Headquarters Locations (2026-06-07)
- Egan-Jones Ratings Company Profile
- Egan-Jones Highlights Improving CLO Credit Quality in July Market Update (2026-07-08)
- Egan-Jones Convenes Nearly 300 Industry Leaders at Second Annual Private Credit Conference (2026-01-27)
- Brawer et al v. Egan-Jones Ratings Company et al (2025-09-29)
- Egan-Jones Ratings Company (2026-05-31)
- Egan-Jones Responds to SEC Order for Formal Review (2026-03-23)
- Egan-Jones Comments on SEC Order Denying Its Application for Exemptive Relief (2026-03-24)
- Key Risks and Investor Strategies for 2026 (2026-01-05)
- Egan-Jones Whistleblower Builds Private-Credit Rater of His Own (2025-12-17)