| FT Letter to the Editor
By Paul Coughlin
7 March 2008
Financial Times
Sir, We would like to address a couple of points in your story on US municipal bonds ("California decides not to insure $1.75bn municipal bond issue", March 5).
You report that municipal and corporate bonds are "rated on different scales". At Standard & Poor's, we do not hold municipal borrowers to different and/or higher standards than corporate borrowers or any other kind of issuer.
You also report that "municipalities often carry lower credit ratings" than corporate debt. In the US municipal sector, 99 per cent of credit ratings assigned by S&P are investment grade; in the US corporate sector, only about 20 per cent of ratings assigned in recent years have been investment grade.
Credit ratings play an important role in the growth and effective functioning of the global capital markets, which is why S&P continues to take steps to provide investors with enhanced transparency for assessing credit risk and greater clarity about our ratings process.
Paul Coughlin
Executive Managing Director
Ratings Services
Standard & Poor's
New York, N.Y.
|
