Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Craig Huber – Barclay’s Capital
Craig Huber – Barclay’s Capital
Could you just talk a bit about your non-transaction line with an S&P ratings, about 2.5% almost, that line I understand includes syndicated bank loans? The transaction piece of that?
Robert Bahash
Correct.
Craig Huber – Barclay’s Capital
So does that account for why that line was down sequentially, about $341 million in the second quarter versus $319 here in the third quarter?
Robert Bahash
That certainly was a factor but again I think that coupled in all of that is the obviously continued weakness in this current environment, just the last four or five weeks alone.
Craig Huber – Barclay’s Capital
As you think out to next year about that line would you expect that line to be up, putting aside the syndicated bank loan transactions in there?
Harold McGraw
Well it really depends on your expectations for revival of the credit market. We certainly would expect that at this point but we’re going to have to see some signals, some evidence of that.
Craig Huber – Barclay’s Capital
But I assume here in the third quarter your surveillance fee part of it which is a large portion of that line is up year-over-year right?
Harold McGraw
Correct.
Robert Bahash
The structured finance side saw sequentially a decline on a quarter-to-quarter basis and that’s in part due to, and we saw that really coming from the first quarter and second quarter. Last year toward the end of the year there were a number of transactions that we had done our work on that had not been completed and they carried themselves over into the first and second quarters of this year. And as a result the issuers did not go forward and there were certain breakage fees that we recorded relating to those transactions. It was a non-transaction event because no transaction happened. We don’t see that same continuation. It clearly did not occur in the third quarter so that also contributes to the slower performance on a quarter-to-quarter basis.
Craig Huber – Barclay’s Capital
On the index business, just given what’s happened in the marketplace this year, are you actually seeing negative growth there right now or forecasting for the fourth quarter?
Harold McGraw
No, in fact we’re still seeing very good growth that way and this year the launch of the new ETFs in particular compared to last year has been at a stronger rate so there has been more interest in ETFs and involvement with various exchanges then last year. It’s a very encouraging development.
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