| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Fitch Ratings Review of U.S Public Finance: Downgrades Continue to Outnumber Upgrades. |
Fitch Ratings, January 25, 2010
Fitch Ratings-New York-25 January 2010: Fitch Ratings notes that during fourth quarter 2009 (4Q'09) and for the fourth consecutive quarter, U.S. public finance downgrades outnumbered upgrades. This trend is expected to continue as Negative Outlooks and Watches still heavily outweigh Positive Outlooks (more than 4:1) and Watches (nearly 7:1). However, a majority of the actual rating changes, 71.3%, during the quarter were affirmations, with no change in Outlook or Watch status. Further, 87.3% of ratings had a Stable Outlook at the end of 4Q'09.
Rating changes:
--Downgrades: 70 credits, which represent 7.8% of all rating actions and $24.3 billion in par value;
--Upgrades: 58 credits, which represent 6.5% of all rating actions and total $18.2 billion;
--Downgrade-to-upgrade ratio (by rating action): 1.2:1, (decreased from 2.1:1 in the prior quarter);
--Downgrade-to-upgrade ratio (by par): 1.3:1 (decreased from 10.9:1 in the prior quarter).
Outlooks/Watches:
--Negative Outlooks: 297 credits (increased from 254 in the prior quarter). The number of negative Outlooks has increased for eight straight quarters;
--Positive Outlooks: 70 credits (decreased from 84 in the prior quarter);
--Ratio of Negative Outlooks to Positive Outlooks: 4.2:1 (increased from 3.0:1 in the prior quarter). This ratio has increased for eight straight quarters;
--Rating Watch Negative: 33 credits (decreased from 37 in prior quarter);
--Rating Watch Positive: 5 credits (unchanged from prior quarter).
Significant Downgrades:
City of Philadelphia:
--$2.7 billion general obligation (GO) bonds downgraded to 'BBB' from 'BBB+' and removed from Rating Watch Negative.
The city's rating level reflects its exceptionally high debt levels, limited financial flexibility, significantly under-funded pension position, rapidly growing fixed-cost burden related to employee benefits, and below-average economic indicators. While these are concerns, Fitch also recognizes the city's strong financial management and solid employment base anchored by its role as a regional economic center which serves as home to several major health care and higher education institutions.
City of Los Angeles:
--$1.5 billion GO bonds downgraded to 'AA-' from 'AA' with outlook remaining Negative;
--$49.7 million lease revenue bonds downgraded to 'AA-' from 'AA';
--$1.6 billion in associated lease revenue and appropriation-backed bonds downgraded to 'A+' from 'AA-'; Outlook remains Negative.
The downgrade reflects high unemployment, sales tax weakness, assessed value losses, and high home foreclosure and negative amortization mortgage exposure. These factors are balanced by the economy's strong underpinnings as the commercial and cultural center of a large and populous geographical area, moderate overall debt burden, and some funding for retiree medical costs beyond current year payments.
State of Nevada:
--$2.4 billion GO bonds downgraded to 'AA' from 'AA+'; Outlook revised to Stable from Negative.
The economic downturn has had a severe impact on the state's financial operations, with economically sensitive revenues falling dramatically. However, Nevada's debt burden is modest, and positive financial operations after the last downturn allowed for the build-up of reserves and general fund surpluses.
Puerto Rico Electric Power Authority:
--$6.5 billion power revenue bonds downgraded to 'BBB+' from 'A-'.
The downgrade reflects a declining trend in the utility's financial profile, reduced electric sales, and economic pressures affecting customer delinquencies. The rating takes into account management's steps to strengthen the utility's financial profile through material cost reductions and positive signs associated with the government's fiscal stabilization plan.
Significant Upgrades:
State of California:
--$8.3 billion economic recovery bonds upgraded to 'A' from 'BBB'.
The rating is based on the reestablishment of sufficient coverage of debt service by pledged revenues following the restructuring of outstanding bonds. The restructuring lowers the annual debt service well beneath the current profile, providing a stronger margin of excess coverage by pledged revenues.
State of Louisiana:
--$2.8 billion GO bonds upgraded to 'AA-' from 'AA';
--$300 million state appropriation-backed bonds upgraded to 'A+' from 'A'.
The rating reflects the state's ability to maintain budget balance and sizable reserves over the course of fiscal 2009 and in budgeting for fiscal 2010 as economic and revenue performance weakened.
Illinois Housing Development Authority:
--$1.4 billion GO bonds upgraded to 'AA-' from 'A+'.
The upgrade reflects continued improvement in the Authority's leverage profile despite the stressed credit and economic environment.
Allina Health System:
--$1.1 billion revenue bonds upgraded to 'A+' from 'A'.
The upgrade reflects Allina's improving operating profitability, the strategic benefits from Allina's growing integrated delivery model, its leading market position, solid balance sheet indicators and light debt burden.
Rating Changes by Sector:
--Healthcare: 11 downgrades and 12 upgrades. The health care sector had the most upgrades and downgrades as a proportion of all rating actions, with upgrades accounting for approximately 10.5% of activity in the sector, while downgrades accounted for 9.7%.
Health Care is operating in a stressed environment as hospitals and senior living facilities are facing uncertainty related to health care reform and the lingering impact of the financial crisis. Furthermore, the combination of declining investment portfolios, falling volumes, and reduced profitability has translated into rating downgrades. Those borrowers that were upgraded continue to do well in difficult economic circumstances, often benefiting from cost reduction efforts, market share gains, and the successful completion of substantial capital projects.
--Tax-supported: 45 downgrades and 39 upgrades;
--Education/Nonprofits: 1 downgrade and 2 upgrades;
--Housing : 2 upgrades;
--Water & Sewer: 5 downgrades and 3 upgrades;
--Public Power: 4 downgrades;
--Transportation: 2 downgrades;
--State Programs: 1 downgrade.
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.
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Income Security Recommendation January 2013 Issue.
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