Appeared on July 12, 2007
But while the rating services argue that they are merely offering opinion, they are involved in a lot more, said Joseph Mason, an associate professor of finance at Drexel University in Philadelphia. He said they work directly with underwriters to determine the size of each tranche, or group of debt, and are active in the entire structuring of CDOs to achieve a rating target. "The rating companies view is we offer an editorial opinion," Mr. Mason said. "That's clearly not the case. Rating companies are involved in financial engineering."