| NYT Letter to the Editor
By Paul Coughlin
13 March 2008
The New York Times
To the Editor:
Re ''States and Cities Start Rebelling on Bond Ratings'' (front page, March 3):
Standard & Poor's credit ratings provide meaningful opinions on the creditworthiness of a borrower. We do not assign municipal bonds ''relatively weak credit scores.'' In fact, more than 99 percent of rated municipal issuers are investment grade, compared with less than 20 percent of rated corporate issuers.
Municipal borrowers generally have strong credit quality. That said, some have defaulted. Our recent municipal transition and default study shows 34 defaults by rated issuers between 1986 and 2006.
Further, S.&P. takes no position on, and has no interest in, whether a bond issuer seeks insurance. If an issuer secures bond insurance, it pays the insurer for that coverage, not S.&P., and we do not collect any additional fees for rerating them.
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.
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