Limited Brands said it will sell $750 million in 10-year notes. The company said it intends to use the proceeds to repurchase $500 million of stock under a new share repurchase program and for general corporate purposes.

The move seemed to surprise some commentators. But investors applauded the move, bidding up the stock by more than 1 percent when it began trading Tuesday morning.

Monday was a good day to be an Indonesian CFO.

Moody's upgraded the Republic of Indonesia from Ba2 to Ba1, one level short of investment grade. With the sovereign ceiling raised, a whole raft of upgrades followed for 10 of the country's banks, and for the national gas, electric and cements companies. Financing costs have come down and the country edges closer to the deep well of money available to those deemed investment grade.

As part of the financial overhaul, federal banking agencies have jumpstarted the process of finding alternatives to using credit ratings for calculating banks' capital levels. But alternatives are few and far between and some could be expensive too.

The various bank agencies - the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision - are seeking to gather information and comments on alternatives and on a set of criteria considered important to evaluate creditworthiness standards such as risk sensitivity, transparency, consistency and simplicity.

Credit quality, on average, may be improving. And if the economy continues to grow, the worst of the credit crisis may finally be behind us.

However, a new Standard & Poor's report warns that the credit improvement is mixed when you drill down to individual industries.

The main three credit ratings agencies have told Wall Street in recent weeks that underwriters won't be able to use their credit ratings in documents selling asset-backed securities for fear of being sued.

While it has already placed the ABS market on hold and has securitization professionals up in arms, there are several ways for banks to continue to sell ABS going forward.

As companies branch out beyond traditional funding sources, many are considering tapping the unrated bond market. Investors are snapping up deals – enjoying the higher returns from unrated bonds—and companies are starting to recognize that demand. While they may have to pay a premium to make up for the lack of a rating, and the disclosures that go with it, the development could augur less reliance on rating agencies, whose value has been called into question.

A number of deals have gone forward in both the US and in Europe—although more in Europe, which traditionally has a larger unrated market. For example, UK rail company National Express launched a $570 million, 7-year deal in January, which came in with a coupon of 6.25 percent.

The downgrade of Greece to junk status by Moody's Investors Service this week highlighted once again how actions of credit ratings agencies are becoming almost useless to investors. Nevertheless, ratings firms may escape any major changes to their business as financial reform is currently being discussed.

Greece has been trading as a junk credit for a couple of months, despite the 110 billion euros rescue package provided a month ago. As a result, Moody's downgrade is only confirming what market participants have long anticipated.

Warren Buffett defended Moody’s Investors Service at a hearing in Washington yesterday, saying the credit rating agency had a great business model. But that model would change drastically under a little-noticed provision of financial reform legislation to be hashed out in conference committee. Under an amendment sponsored by Senator Al Franken (D-MN), the bill passed by the Senate would instruct the SEC to establish a self-regulatory organization to assign credit rating agencies to provide initial ratings for structured financial products. The amendment passed 64 to 35, with bi-partisan support; included among its co-sponsors were Senators Chuck Grassley (R-IA) and Roger Wicker (R-MS).

In a conference call, Senator Franken indicated that the amendment focused on the conflict of interest inherent in the current process. Because issuers get to choose who handles their ratings, it’s all too easy for them to shop for the firm most likely to provide a favorable rating. At the same time, the agencies know that their business success depends largely on their ability and willingness to provide the ratings their customers are looking for – which they often did. In return, Moody’s, S&P and Fitch, the three major rating agencies, largely controlled the market for ratings, as this report from the Federal Crisis Inquiry Commission, shows. As Richard Cordray, Ohio’s AG said on the call, “The issuer-paid system is corrupt.”

When it comes to balance sheet management, heavily leveraged issuers face a big bet on the course of the economy.

With interest rates expected to rise during the next year or so, investors are looking for credits that allow some room to cushion the weight of higher interest costs rates while still providing appetizing yields.

An increasing number of companies are in financial distress in the UK, where the recovery is taking even longer to materialize than it is in the US. What's more, businesses don't have as many options to patch up their balance sheets as their counterparts do in the US.

More than 160,000 companies experienced significant or critical distress in the first quarter, owing 55 billion pounds to their creditors, according to a study released this week by Begbies Trayno, a restructuring specialist in the UK. This is up 14 percent from the fourth quarter of 2009.