Steve Murphy will retire as the national head of public finance at Standard & Poor's effective July 31, after 33-1/2 years with the rating agency, Murphy and the rating agency confirmed in an interview Tuesday afternoon.
"It's just time. If I drew up my personal bumper sticker it would say just that: it's time," said Murphy, 56, who said he will move from New York to Lexington, Ky., where he has family.
S&P has yet to name a successor or announce a timetable.
Murphy said he hasn't closed the door on public finance altogether. "I'd like to eventually take on something else once I get settled," said Murphy. He called Lexington "really a beautiful, beautiful place to live."
Murphy came to Standard & Poor's in 1981, right out of college, joined the public finance group two years later and worked up the ranks. He has seen S&P's U.S. public finance team expand from about 30 to 290 people.
It rates more than 19,000 entities, including U.S. states, local governments, public and private higher education, not-for-profit health care, tax-exempt housing, municipal utilities, municipal structured, public power, airports, ports, toll roads and infrastructure.
"It's been a really interesting run. I've seen the market develop from what it was in 1981, going from about $399 billion to $3.7 trillion today, and from 4,000 to over 18,000 deals per year," Murphy said in an interview. "This market is critically important to the U.S. trying to meet its infrastructure needs, which are daunting.
"S&P's U.S. public finance department has accomplished a lot as a team," he added. "We've done a lot related to enhancing transparency, implementing a local GO criteria change, and providing insight on issues including bankruptcy and pensions. Things are a lot better in the market with regard to disclosure."
Murphy succeeded Bill Montrone as the head of public finance on Jan. 16, 2013, and realigned the group three months later. As public finance chief, he was responsible for promoting the department's growth and setting its analytical and strategic direction.
Murphy over the years held several senior analytical and management positions within the public finance department, overseeing the state and local government ratings and municipal enterprise ratings groups.
"He did good," Dick Larkin, now a senior vice president and director of credit analysis at HJ Sims & Co. in Boca Raton, Fla., said Tuesday. Larkin signed off on the initial hiring of Murphy.
"I remember Steve when he working in what we called 'Stat City,' " in which three people worked in one cubicle because we didn't have any space. He was jammed between two other guys," said Larkin. "He became a solid analyst and manager, a hard worker and determined, and certainly not one to back off from any belief that he felt strongly."
According to Larkin, Murphy's biggest accomplishment during his 18 months as national head of U.S. public finance was to revise S&P's criteria for local general obligation ratings on a case-by-case basis.
"Steve was innovative and savvy when it came time to looking at changing the rating criteria and adapting to new ways of doing it," said Larkin. "I said at the time that Moody's and Fitch made a major mistake by recalibrating the ratings and implementing them on a wide-scale, immediate basis."
Murphy has commented frequently to media outlets, notably about Detroit's bankruptcy filing last year. Murphy was the primary analyst covering Detroit, Michigan, and several cities and counties there from 1986 to the early 2000s.
"It's always been and continues to be a fascinating place," Murphy said of Detroit.
According to Murphy, the scarcity of bankruptcy filings underscores the strength of the municipal market. "We did not have the wave of bankruptcies that were predicted in '09 and '10, though we had a few resulting from pockets of credit stress, which were anticipated," he said.
Murphy, who has analyzed many types of tax-exempt debt, worries more about the end of tax-exemption for munis.
"We're at risk not of an avalanche of bankruptcies, but a risk of taxability, which has a lot more traction than in recent years. The tax-exempt municipal market is critically important to the economy," he said. "Sustained underinvestment is also a credit-standing risk."
Murphy is a member of several state Government Finance Officers' Associations, the National Federation of Municipal Analysts, the Society of Municipal Analysts, the Municipal Forum of New York and the Municipal Analysts Group of New York.
