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New S&P Public Finance Head Realigns Department

Standard & Poor’s public finance department is getting a makeover.

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First with a new department leader, and now, with a new organizational structure.

Steve Murphy became the head of public finance on January 16, succeeding Bill Montrone after he left in late December. Murphy came to Standard & Poor’s in 1981, right out of college, joined the public finance group in 1983, and has worked his way through the ranks to where he is today.

Murphy held several senior analytical and management positions within the public finance department and most recently lead the state and local government ratings group. Before that, he headed the municipal enterprise ratings group.

“I’m very fortunate to be in this position because this is a really, really talented group,” Murphy said. “We have many people with a lot of industry experience, and so they know what they’re doing. The onus is on me to set the direction to go in.”

As head of public finance, Murphy is responsible for promoting the department’s growth and setting its analytical and strategic direction. He started last week by implementing a realignment of the public finance department in order to put forth a more effective platform.

First, Murphy said they are re-creating the public finance structured finance analytical team. This team will be a part of the public finance housing group, which will report to Valerie White, managing director and lead analytical manager.

Next, he has combined the education and not-for-profit healthcare teams with the state ratings group. The entire group reports to Robin Prunty, managing director and lead analytical manager. Murphy said that there are significant analytic synergies between these groups and combining them enhances their analytic platform.

“When you think about things like state education aid, grants, which are sometimes passed through the federal government and sometimes through the state, and healthcare mandates at the state level, there’s a lot of interdependency there,” Murphy said.

In the local government group, Murphy thought it would be more effective to have it split into to two teams. Jeffrey Previdi, managing director, will serve as lead analytical manager for what he calls the Great Lakes and East regions. This includes their New York, Boston and Chicago offices.

Horacio Aldrete, managing director, has been promoted to lead analytical manager and will oversee the West and Southwest regions, which include the San Francisco and Dallas offices.

“That group has just grown in leaps and bounds over the past few years due to market dynamics,” Murphy said. “I feel it will be more effectively managed as two smaller groups.”

Murphy did not make any changes to the fifth group — the public and infrastructure group, which includes water, other utilities, and transportation. Geoffrey Buswick, managing director and lead analytical manager, will continue to lead the team.

Each group has a team of analysts. Murphy said there will be analytical managers named within the groups sometime in the future.

Murphy also asked Mal Fallon, managing director, to take responsibility for enhancing analytic support of outreach efforts, driving department-wide thought leadership strategy, and coordinating key analytic support initiatives. Fallon will be the point of contact for market development, communications, and other areas of the company that support the public finance department.

The new organizational changes took effect April 15.

“I’m very pleased with where the department is now, and very pleased with the people who have these key positions,” Murphy said. “I can’t say that something unanticipated won’t come up, like a change in the market that we’ll have to react to, but for now, we’re in good shape.”

From a credit standpoint, Murphy said there is still a lot to keep watch for, including continued fallout from the recession and infrastructure underinvestment’s potential impact on states and local governments going forward.

Other challenges that lie ahead for the industry in the near-term include seeing more timely and transparent disclosure from issuers, determining how public information is delivered through alternate media, the potential impact from possible tax policy changes, and the need for market participants to maintain a voice and identity so people understand why the public finance industry is so important.

Going forward, goals for the public finance department include anticipating the unexpected, keeping the analytic staff as flexible as possible, and listening to market feedback and reacting to it.

“We’ll anticipate growth where possible — it is, however, always a difficult call — and continue to specialize where warranted,” Murphy said. “I think we’re in a good state after this reorganization, but you never know what you’ll need down the line.”

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