U.S. public finance (USPF) upgrades again outnumbered downgrades during the third quarter, but the upgrade-to-downgrade ratio continues to decline. The slower pace of upgrades reflected, in part, Standard & Poor’s Ratings Services completing its implementation of its revised local government general obligation (GO) bond rating criteria during the third quarter. The revised criteria resulted in upward revisions of approximately 41% of our local government ratings. Through the 12-month criteria implementation period, our upgrade ratio reflected this transition to a higher local government ratings distribution.
As the criteria implementation began to wind down, the upgrade-to-downgrade ratio declined in step with the decrease in criteria-related rating actions. The 2.18 to one upgrade to downgrade ratio during the third quarter was lower than in any other period since the second quarter of 2013 — just before the introduction of our revised local government criteria.
10-Nov-2014