Credit rating companies may soon have to use one system to evaluate the credit of every group that issues bonds, whether the group is a public body like a Municipality, or a private corporation. One reason for one system is that the two systems used currently by the credit raters for some reason make the credit ratings of Municipalities, which generally do not default on their debts, much lower than the credit ratings of many private corporations, which defaulted on their debts at a much higher rate even before they caused the current credit crisis.
The effect on Bond Insurance Companies may be enormous. They may cease to exist if the credit ratings of Municipal and other Government Bonds are changed to rate based on reality. See generally Christine Richard & Michael McDonald, "House's Frank Says Municipal Ratings Add Unfair Costs (Update 2)" (Bloomberg.com, Wed., March 12, 2008).
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