Revenue of $1.5 billion grew 13% due to strong customer demand for our mission-critical products and insights.
Meanwhile, MA experienced strong growth across our subscription-based products, which now comprise 93% of total MA revenue on a trailing 12-month basis.
Additionally, we've raised and narrowed our adjusted diluted earnings per share guidance to be in the range of $12.15 to $12.35, which, at the midpoint of $12.25, represents an approximate 21% annual growth rate.
In the third quarter, MIS revenue was up 12% from the prior year and MA revenue was up 13%.
Organic MA revenue increased 8%.
Moody's adjusted operating income rose 2% to $737 million.
Adjusted diluted earnings per share was $2.69, flat to the prior year period, and Mark will provide some additional details on our financials shortly.
The U.S. default rate is forecast to fall below 2% by year-end.
That's a significant reduction from a pandemic high of nearly 9%.
Based on our annual research published by Moody's Investors Service earlier this month, refunding walls over the next four years for U.S. and European issuers have increased 9% to approximately $4.1 trillion.
This is slightly above the historical compound annual growth rate and is supported by 19% growth in U.S. leveraged loan forward maturities and 7% growth in U.S. investment-grade forward maturities, providing a solid underpinning for medium-term issuance.
MA's recurring revenue grew 18% in the quarter.
And as I mentioned earlier, now represents 93% of total MA revenue on a trailing 12-month basis.
Each of these businesses currently represent at least $100 million of annual revenue with growth rates above 10% versus the prior year.
Recurring revenue for our insurance and asset management business within ERS increased in the mid-20s percent range and was driven by ongoing demand for our actuarial modeling and IFRS 17 solutions.
And I described how our differentiated offerings are driving organic growth rates north of 20%.
They chose our Compliance Catalyst solution to help them onboard and monitor almost 20,000 suppliers, primarily because it provided them with a single tool from which to source high-quality compliance, financial and ESG data.
That new module enhances our award-winning models and covers 40,000 public companies and millions of private firms.
We brought forward our commitment to achieve net zero across our operations and value chain to 2040, and that's 10 years earlier than our original target.
In the third quarter, MIS revenue and rated issuance increased 12% and 11%, respectively, on elevated leveraged loan and CLO activity.
Corporate finance revenue grew 6% compared to a 2% increase in issuance.
Financial institutions revenue rose 14%, supported by 25% growth in issuance.
Transaction revenue was up 24% as infrequent bank and insurance issuers took advantage of the attractive rate and spread environment.
Revenue from public, project and infrastructure finance declined 2% compared to a 17% decrease in issuance as U.S. public finance issuers largely fulfilled their funding needs in prior periods.
Structured finance revenue was up 63%, supported by strong recovery in issuance.
MIS' adjusted operating margin benefited from approximately 190 basis points of underlying expansion, more than offset by the impact of higher incentive compensation associated with our improved full year outlook, a legal accrual adjustment in the prior year and a charitable contribution via The Moody's Foundation.
Third quarter revenue rose 13% or 8% on an organic basis.
Ongoing demand for our KYC and compliance solutions as well as data feed drove a 15% increase in RD&A revenue or 12% organically.
ERS revenue rose 8% in the quarter.
Organic recurring revenue grew 13% driven by customer demand for our banking products as well as insurance analytics solutions.
This was more than offset by an expected decline in onetime revenue and led to a 2% decrease in overall organic revenue.
As a result of our strategic shift toward SaaS-based solutions, recurring revenue comprised 90% of total ERS revenue in the third quarter, up 12 percentage points from the prior year period.
MA's adjusted operating margin benefited from approximately 210 basis points underlying expansion, more than offset by acquisitions completed in the last 12 months, nonrecurring transaction costs associated with RMS and the charitable contribution via The Moody's Foundation.
2021 U.S. GDP will rise in the range of 5.5% to 6.5%, and Euro area GDP will increase in the range of 4.5% to 5.5%.
Benchmark interest rates will gradually rise, with U.S. high-yield spreads remaining below approximately 500 basis points.
The U.S. unemployment rate will remain below 5% through year-end, and the global high-yield default rate will fall below 2% by year-end.
Specifically, our forecast for the balance of 2021 reflects U.S. exchange rates for the British pound of $1.35 and $1.16 for the euro.
Moody's revenue is now projected to increase in the low teens percent range, and we have maintained our expectation for expenses to grow approximately 10%.
As such, with an improved revenue outlook and ongoing expense discipline, we have expanded Moody's adjusted operating margin forecast to be approximately 51%.
We raised and narrowed the diluted and adjusted diluted earnings per share guidance ranges to $11.65 to $11.85 and $12.15 to $12.35, respectively.
We forecast free cash flow to remain between $2.2 billion and $2.3 billion and anticipate that full year share repurchases will remain at approximately $750 million, subject to available cash, market conditions, M&A opportunities and other ongoing capital allocation.
Within MIS, we now forecast full year revenue to increase in the low teens percent range and rated issuance to grow in the high single-digit percent range.
MIS' issuance guidance assumes that full year leveraged loan and structured finance issuance will both increase by approximately 100%, up from our prior assumption of 75% growth for each of these asset classes.
Investment-grade issuance is forecast to decline by approximately 35%, an improvement from our prior assumption of a 40% decrease.
High-yield bond issuance is expected to increase by approximately 20%, slightly lower than our prior outlook.
Additionally, we are raising our guidance for first-time mandates to a range of 1,050 to 1,150.
We're also increasing MIS' adjusted operating margin guidance to approximately 62%, which implies approximately 200 basis points of margin expansion compared to 2020's full year result.
We are also reaffirming the adjusted operating margin guidance of approximately 29%.
Excluding the impact of acquisitions completed in the prior 12 months, MA revenue is anticipated to increase in the high single-digit percent range, and the adjusted operating margin is forecast to expand by approximately 300 basis points.
As I mentioned previously, we are reaffirming our full year 2021 expense growth guidance of approximately 10%.
For the third quarter, operating expenses rose 19% over the prior year period, of which approximately 16 percentage points were attributable to operational and transaction-related costs associated with recent acquisitions, including RMS, as well as higher incentive and stock-based compensation accruals, a $16 million charitable contribution via The Moody's Foundation and movement in foreign exchange rates.
The remaining expense growth of approximately 3% was comprised of organic investments as well as operating costs such as hiring and salary increases and was partially offset by ongoing cost efficiency initiatives.
We are on track to reinvest approximately $110 million back into the business in 2021.

Summary:
Revenue of $1.5 billion grew 13% due to strong customer demand for our mission-critical products and insights.
Additionally, we've raised and narrowed our adjusted diluted earnings per share guidance to be in the range of $12.15 to $12.35, which, at the midpoint of $12.25, represents an approximate 21% annual growth rate.
Adjusted diluted earnings per share was $2.69, flat to the prior year period, and Mark will provide some additional details on our financials shortly.
Each of these businesses currently represent at least $100 million of annual revenue with growth rates above 10% versus the prior year.
We raised and narrowed the diluted and adjusted diluted earnings per share guidance ranges to $11.65 to $11.85 and $12.15 to $12.35, respectively.
Within MIS, we now forecast full year revenue to increase in the low teens percent range and rated issuance to grow in the high single-digit percent range.
MIS' issuance guidance assumes that full year leveraged loan and structured finance issuance will both increase by approximately 100%, up from our prior assumption of 75% growth for each of these asset classes.