Standard & Poor's issued a report saying that upgrades to credit ratings of municipal debt issuers outpaced downgrades for a third consecutive year in 2015, the strongest such run since 2001, Reuters reported yesterday. Upgrades outpaced downgrades by a ratio of 2.20 to 1 during the year, the report found, although this was at a slower pace than the previous year when upgrades led by a ratio of 3.33 to 1. The outperformance of upgrades coincides with a period of recovery for many state and local governments that have rebuilt revenues after the financial crisis and recession of 2007-2009. "The year ended with 13 straight quarters of more upgrades than downgrades, the longest streak since the first quarter of 2001," said Larry Witte, senior director of S&P Global Fixed Income Research. Municipal bankruptcies, however, also rose, climbing to 12 last year from eight in 2014. Over the last five years, defaults have exceeded the long-run average of three per year since 1986. There were 21 defaults of appropriation debt between 2011 and 2015, after only three in the previous 25 years, according to the study. Read more.
Is chapter 9 coming to a city near you? Panel at ABI’s Central States Bankruptcy Workshop will examine in June. Click here for more information and to register.
