Is an Upgrade in Your Future?

• Position: Municipal bonds - Brief Article

Fitch IBCA Inc.,plans to adopt new ranges for ratings in more than a dozen different market sectors, based on the findings of the municipal default survey it conducted last year (see December 1999 Government Finance Review, "Measuring Municipal Default Risk"). The study found that municipal bonds are the second safest type of bond behind U.S. Treasury and agency debt. The agency will review, and in many cases, revise its outstanding ratings. Upgrades are expected in general obligation (GO), water/sewer, utility, special tax, education, and state categories. Although there always will be outliers, expected rating ranges for county GO bonds and water and sewer system revenue bonds should be between A minus and AAA. State GOs should be rated...