August 12, 2011 > US state and local government ratings can be higher than the sovereign
US state and local government ratings can be higher than the sovereign
Submitted By Standard & Poor's
Following the downgrade of the U.S. sovereign debt rating on August 5, 2011, Standard & Poor's Ratings Services explains in a new report that some U.S. state and local government obligors can maintain or achieve ratings higher than the sovereign. The report, "State And Local Government Ratings Are Not Directly Constrained By That Of The U.S. Sovereign," explains the factors that allow for this situation to occasionally occur.
The report notes that many U.S. state and local governments function with a high level of revenue, treasury, finance and debt management independence compared to their global counterparts. Factors considered by S&P when determining a state or local government's rating are detailed in the agency's relevant criteria documents: "USPF Criteria: State Ratings Methodology," published January 3, 2011, and "USPF Criteria: GO Debt", published October 12, 2006.
The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. Others may purchase a copy of the report by calling (212) 438-7280 or sending an e-mail to email@example.com. Ratings information can also be found at www.standardandpoors.com.