Kroll Picks Up Public Finance Veteran

Gary Krellenstein is moving to where he thinks the action in munis is — credit analysis.

The public finance veteran became the latest hire last week at rating agency startup Kroll Bond Ratings, which has been gearing up the last year to enter the municipal market.

“If there’s ever been a time for a new rating agency in the last 50 years, it’s probably now,” Krellenstein said.

He made the move after spending more than 10 years as a managing director at JPMorgan. Before that, he spent two years at First Albany, 11 at Lehman Brothers, and two at Merrill Lynch. His career in the sector began at JPMorgan in 1983.

The attraction of going to Kroll, which acquired its designation as a nationally recognized statistical rating organization last year, is the need to disseminate more insight to market participants, particularly among low-rated sectors.

“There’s a need for greater diligence on the part of investors and rating agencies, and maybe some different metrics that need to be developed,” Krellenstein said.

He joins the firm just weeks before it plans to release a comprehensive study of muni bond defaults. Krellenstein said the staff is doing “final revisions” to the study with the aim to publish it in a few weeks.

James Nadler, president of Kroll, has called the study a modern update to the 1971 George Hempel study, which evaluated the market in the Depression era from 1929 to 1937. Kroll “is very pleased to welcome Gary aboard as he brings with him a wealth of knowledge and in-depth industry experience that will allow us to further grow into the public finance area,” Nadler said in a press release.

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