NEW YORK - Moody's Investors Service said it will recalibrate its ratings of U.S. municipal bond issues and issuers to its global rating scale beginning in mid-April. The purpose of the recalibration is to enhance the comparability of credit ratings across Moody's-rated universe.
All municipal scale ratings will be recalibrated to the global scale according to a methodology being issued today. The global scale ratings will replace all outstanding municipal scale ratings. Approximately 70,000 sale-level ratings will be subject to the recalibration.
"We are responding to the evolving needs of the market for greater comparability between the ratings of these obligations and those issued by other entities, such as corporations," said Moody's Group Managing Director Gail Sussman. "The recalibration of the ratings represents a move from their expression on one scale to another and does not represent a change in our opinion of the credit quality of the affected issuers," she added. Moody's has used a distinct rating scale for U.S. municipal bonds since 1918.
For new sales during the recalibration period, securities will be rated on the municipal rating scale if the sector (e.g. states, transportation authorities, higher education, healthcare, etc.) has not been recalibrated, and on the global rating scale if that sector has already been recalibrated. This is designed to maintain comparability among like securities during the transition. For local governments, the sector is defined as all local governments in the same state.
During the recalibration process, bond issues and issuers that have been recalibrated to the global scale will carry a (GSR) notation on moodys.com. Moody's other data products will likewise clearly identify which municipal ratings have been recalibrated to the global scale.
