Moody's downgrades FMR

Moody's Investors Service said it downgraded the long-term senior unsecured debt rating of FMR LLC to A1 from Aa3.

The outlook is now stable.

The agency said the downgrade reflects the loss of the dominating market share lead that the company formerly enjoyed over its nearest competitors, a shifting revenue mix toward lower-margin defined contribution plan servicing and higher volatility brokerage businesses and the company's somewhat diminished financial flexibility caused by its employee incentive programs. Moody's added that constraints on the firm's profitability, driven by the need to sustain competitive advantages in distributing products and services, also factored into the downgrade.

FMR's A1 rating continues to be supported by the company's very good market position, powerful distribution and technology platform and the diversification benefit of its other asset-gathering businesses, the agency said.

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