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I <br /> I <br /> I <br /> I <br /> I <br /> I <br /> I <br /> I <br /> I <br /> I <br /> I <br /> I <br /> I <br />I <br />I <br />I <br />I <br />! <br />I <br /> <br />CAN YOU IMPROVE YOUR BOND RATING? <br /> <br /> BY <br /> <br />HYMTtN C. GROSSM3kN, VICE PRESIDENT <br />STANDARD & POOR'S CORPORATION <br /> <br /> We appreciate the opportunity to share with you some of the <br />salient features of our debt rating work in state and local <br />governments. Although most of our thoughts will be geared to <br />general obligation, general government; the major thrust of our <br />rating factors cross the broad spectrum of most different types <br />of debt instruments. <br /> <br /> In addition to describing the basic credit factors we examine, <br />we will discuss financial reporting and its significance and the <br />importance of a rating presentation to S&P. To the question, can <br />you improve your bond rating?; the answer is, very often, yes. But <br />sometimes the answer is frankly, no, and not because you may already <br />have a 'AAA' rating. <br /> <br />First, let us define what a bond rating is and is..-'not. <br /> <br /> A bond rating is a current assessment of the creditworthiness <br />of an obligor with respect to a specific debt obligation. The bond <br />rating is not a recommendation to purchase or sell a security, <br />inasmuch as it does not conunent as to market price. <br /> <br /> The ratings are based on current information furnished to <br />Standard & Poor's by the issuer and obtained by Standard & Poor's <br />from other sources it considers reliable. The ratings may be <br />changed, withdrawn or placed on creditwatch as a result of changes <br />in, or unavailability of, such information. <br /> <br /> The ratings are based, in varying degrees, on the following <br />considerations: <br /> <br />Likelihood of default -- Capacity and willingness of <br />the obligor as to the timely payment of interest and <br />repasnnent, of principal in accordance with the terms <br />of the obligation <br /> <br />II. Nature of provisions of the obligation <br /> <br />III. <br /> <br />Protection afforded by, and relative position of, <br />the obligation in the event of bankruptcy, <br />reorganization or other arrangement under the laws <br />of bankruptcy and other laws affecting creditors' <br />rights. <br /> <br />Presentation to the '1985 AnnuaI Conference, Municipal Finance <br />Officers Association, New Orleans, Louisiana, May 24, 1982 <br /> <br /> <br />