It's natural that different ratings agencies should disagree sometimes. That's why we have different ratings agencies.
Contrast that with stocks, where anybody can be an analyst and issue a rating, and where there is no mechanical, legalistic system of downgrades and upgrades.
The feds created the bond ratings agency oligopoly to "protect investors", but I'd argue we'd be better served by true ratings competition and more due diligence by investors.
I'm confused. Surely if I decided to set up my own bond rating agency nobody could stop me?
The catch is that the biggest rating agencies accept payments by the company issuing the bond. What happens is that Bank of Insanity gives Moody's a check for $500k to rate their super-senior diseased livestock bond. Moody's then says "at least 5% of the cows will probably survive, and $500k is a lot of money, so this bond is investment grade!"
That's why things work out so poorly.
Nobody can stop you, but nobody can legally use your ratings in regulatory filings.
I think this statement is a little stronger than is accurate. For a time I was on the career path of a stock analyst, and before my name could be on any notes urging investors to buy or sell, I had to take and pass a number of licensing tests: Series 7, 63, 86, and 87. These tests were mandated and run by FINRA, as ordered by the SEC.
So not just "anybody" can issue a rating.
However, I understand your larger message that there aren't larger legal implications surrounding your rating; other than simple anti- market manipulation type things.
The bond raters do still add some value by evaluating new issues or thinly traded securities. In those cases the markets don't give us useful information.