WASHINGTON — The Government Finance Officers Association is strongly criticizing Moody's Investors Service for failing to provide its credit ratings to EMMA and is urging the rating agency to do so.
The GFOA's January letter to members, published Thursday, chides Moody's for being the lone outlier in rating agencies providing the Municipal Securities Rulemaking Board's EMMA website with ratings and rating updates through automated feeds. The MSRB began providing ratings from Fitch Ratings and Standard & Poor's on EMMA in 2011. Kroll Bond Rating Agency followed suit in September last year.
"The GFOA Board cannot understand why it is possible for all of the other major rating agencies, including Fitch, Standard & Poor's, and Kroll, to provide this information to EMMA, while Moody's won't do so," the GFOA said in its letter. "The GFOA has tried for several years to get Moody's to provide direct ratings information to EMMA so that individual issuers aren't required to provide this information. As the market and the [Securities and Exchange Commission] continue to call for greater availability of municipal securities information to the public, we believe that there is nothing more relevant than making credit ratings available in one location, where the public can access the information quickly, efficiently, and at no cost to them. We strongly urge Moody's to begin providing their rating information on EMMA as soon as possible."
Robert Eichem, GFOA president and chief financial officer of Boulder, Colo., said the association's executive board had been hopeful for several weeks that talks between Moody's and the MSRB were progressing well and that Moody's would begin providing their ratings soon. But a few days ago word came that the negotiations were not as advanced as the GFOA thought, leading the group to make a statement.
"It's hard to understand," Eichem said. "We ought to keep using technology the way we can. The other firms are doing it."
Eichem said that using Moody's rating services is less appealing to him as an issuer, because he would prefer to have the ratings of his city's bonds quickly updated on EMMA when and if they change without having to do it himself. While issuer officials still bear the responsibility of making sure the information going out to the market is accurate, Eichem said, having the ratings streamed straight to EMMA is much preferable.
"In the end, it's a business decision," he said.
Moody's stressed that its ratings are available for free to the public.
"Moody's has been engaged in constructive discussions with the MSRB about including our ratings on EMMA and we look forward to continuing this dialogue," the agency said in a statement. "Our ratings are publicly available without charge to all market participants on Moody's website."
