The Government Finance Officers Association and 11 other issuer groups are urging House Financial Services Committee chairman Barney Frank to reintroduce legislation that would require rating agencies to rate municipal and other securities on the basis of default alone. The move came after Moody's Investors Service last week assigned a negative outlook to the entire tax-backed local government sector.

In a two-page letter sent to the Massachusetts Democrat on Tuesday, the groups warned that Moody's action will likely exacerbate what issuers have long argued is a double standard of rating municipal bonds on a more rigorous scale than corporate debt, despite munis' relatively low historical default rates.

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