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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| 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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| More |
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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)
|
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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Rating Agencies Move to Recalibrate City Ratings |
National League Of Cities - April 12, 2010 - by Lars Etzkorn
All three major credit-rating services — Fitch Ratings, Moody's Investors Service, and Standard and Poors (S&P) — are moving to rate municipal debt based on the likelihood of default, which is the standard used for corporate debt. Previously, municipal securities with their historically low default rates have been rated on different scales than corporate debt.
NLC has long called for passage of legislation to address problems associated with different credit rating scales for different securities. Legislation eliminating dual ratings was included in the comprehensive Wall Street Reform and Consumer Protection Act passed by the House of Representatives in December 2009. Sen. Christopher Dodd (D-Conn.) also included bond rating parity in the financial services reform bill he unveiled last month.
“With the handwriting on the wall, we’re pleased the rating agencies are voluntarily moving to rate municipal government bonds on their ability to repay their debt and their historically low rate of default,” said Robin Beltramini, council member, Troy, Mich., and chair of NLC’s Finance, Administration and Intergovernmental Relations Committee (FAIR). “As FAIR has said, doing so will allow new investors to participate in the municipal securities market.”
NLC continues to support passage of legislation ensuring rating agencies use uniform and accurate credit ratings for all securities. Basing ratings on the risk of default is likely to attract new institutional investors that often have guidelines limiting investments to certain ratings. A pension fund may be able to invest in a credit that was rated triple-B, but is rated single-A after the recalibration.
In addition, accurate credit ratings are important for cities trying to balance their budgets. A lower rating increases borrowing costs, so it is important for cities to maintain higher ratings, to lower the cost to issue debt.
Moody's and Fitch will start recalibrating municipal bonds in April. S&P already has started to use comparable rating criteria for municipal and corporate bonds. According to Municipal Market Advisors, over the last several years, S&P has upgraded 8,700 municipal bonds.
Not all municipal bonds will have their ratings recalibrated. Both Moody’s and Fitch will not be adjusting ratings for bonds issued by the following municipal sectors: housing, health care (hospitals), airports, private schools, toll roads and other municipal infrastructure-related enterprises. Moody’s and Fitch state bonds issued from these entities are correctly rated based on their creditworthiness compared to corporate counterparts.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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