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) --

JPMorgan Chase

(JPM) - Get JPMorgan Chase & Co. Report

executives want to know: Which ratings agency is the easiest grader?

JPMorgan CFO Mike Cavanagh assumed it would be


, whose analysts have toiled for years in the shadows of

Moody's Investors Service

(MCO) - Get Moody's Corporation Report


The McGraw Hill Companies


unit, Standard & Poor's.

Cavanagh suggested in a Sept. 22 2008 e-mail to colleagues that Fitch would be a good place for JPMorgan to "practice" its presentation to Moody's and S&P of its planned acquisition of

TheStreet Recommends

Washington Mutual

(WAMUQ.PK) from the

Federal Deposit Insurance Corp.

-- a deal that would become public three days later.

But Brian Keegan, who as a managing director in JPMorgan's "Capital Structure Advisory & Solutions" division presumably dedicates quite a bit of time to thinking about how to win the best possible credit ratings, told Cavanagh that Fitch might not be the walk in the park he expected.

"Sharon Hass

a Fitch analyst who covers JPMorgan is one of the best," Keegan wrote, "S&P is better grounds for practicing."

Keegan and Cavanagh referred questions to a JPMorgan spokesman, who declined to comment. The e-mail messages, which you can read


, surfaced in connection with


over JPMorgan's acquisition of Washington Mutual.

Though the e-mails are illuminating, they are not nearly as damning as other communications that have come to light in the past two years as the ratings agencies have drawn sharp criticism for assigning high marks to securities that have lost untold billions in value.

Probably the most infamous was the instant message from an S&P analyst, who wrote to a colleague that a security

"could be structured by cows and we would rate it."

Sean Egan, a founder of

Egan Jones Ratings Co.

and a frequent critic of the ratings system, chuckled when I described the e-mails to him, but did not seem overly alarmed.

"In fairness to JPMorgan, they can say 'we'd rather go off Broadway before Broadway,'" Egan said.

In the end, Cavanagh may have been right about Fitch being the softie. Fitch sounded the most positive about the impact of WaMu acquisition on JPMorgan's credit rating. Hass and colleague Leslie Bright affirmed the overall issuer rating and called the deal "a strategic positive for JPMorgan Chase."

Standard & Poor's was also relatively easygoing, leaving the rating unchanged.

Assuming JPMorgan did practice on one of these two, however, it did not help. Moody's slapped a negative outlook on JPMorgan following the deal's announcement, downgraded the bank less than two months later and added a new negative outlook in March, 2009. Moody's analysts cited expected additional writedowns on Washington Mutual's $145 billion residential mortgage portfolio as one of the reasons for their concern.

In an interview Friday, Moody's analyst Sean Young said he does not expect any additional writedowns to be significant. He said that view is reflected in the March report.


Written by Dan Freed in New York


Read more:

Questions surrounding another JPMorgan email connected to the WaMu litigation.