Beginning in October 2008, Moody’s Investors Service will recalibrate its ratings of U.S. municipal bond issues and issuers, and migrate these ratings to its global rating scale, to facilitate comparability of credit quality across Moody’s entire rated universe. Moody’s plans to transition its municipal ratings by sector; beginning with state government general obligation ratings, the transition of ratings for a given sector, other than local governments, will take place on a single day during the transition period. The process will continue with general obligation ratings of the 50 largest issuers of local government debt and other closely related entities, then with ratings of issuers and obligations in the enterprise sectors such as health care, higher education, infrastructure and housing, and then the balance of local government ratings. The agency expects to complete the entire transition by early 2009.
During the transition period, Moody’s will assign new ratings that are consistent with the current ratings of other credits in a given sector. Prior to the migration of each sector, Moody’s will publish a sector-specific methodology that outlines its analytical approach and factors that are considered in the placement of the sector’s ratings on the global scale.
Moody’s preliminary analysis indicates that, on average, state and local government general obligation global scale ratings likely will be two notches higher than their current ratings on the municipal scale. Global scale ratings for credits in the enterprise sectors, including health care, are expected to be about one notch higher, on average. For more information, call (212) 553-4133.
