Moody's Investors Service announced today that it will recalibrate its outstanding global scale ratings (GSRs) on taxable municipal bond issues and municipal issuers' obligations under swap transactions and, as a result, has placed 23 of the 28 outstanding GSRs under review. Of the other five existing GSRs, three have already been recalibrated, and two have already been placed under review, in conjunction with rating actions on the associated municipal scale ratings. Moody's will recalibrate these 23 GSRs in the next few weeks. The recalibration is expected to result in lower ratings in some, but not all, cases.
The recalibrated GSRs will be assigned by rating committees composed of analysts from across Moody's Investors Service, including analysts from the corporate, financial institutions, sovereign, sub-sovereign and credit policy teams as well as U.S. municipal bond analysts. The committees will employ a benchmarking process designed to produce recalibrated global scale ratings that will be comparable to ratings assigned to other issuers of similar credit risk.
Moody's previously announced plans to migrate all of its U.S. municipal ratings to the global scale. In September 2008, we provided general guidance about the process, including the results of our preliminary analysis as to the likely migrated global scale ratings for state and local government general obligations, as well as enterprise obligations. At that time, we also announced our plans to recalibrate the existing GSRs at the same time as we migrated the larger municipal portfolio.
We have temporarily suspended the migration of the municipal portfolio as a whole due to the severe disruptions in the credit markets. Consequently, we are proceeding with the recalibration of the existing GSRs at this time. The recalibrations will be announced as they are completed. To the extent that, during this period, there is a change in the municipal scale rating associated with any of these GSRs, the recalibration of the GSR will be done simultaneously with the change in the municipal scale rating. Any future changes in these global scale ratings would be related to a change in fundamental credit position rather than a result of the recalibration of the ratings scale.
The following ratings are placed under review as part of Moody's recalibration of its municipal global scale ratings:
-- Allentown, PA Federally Taxable General Obligation Notes, Series A of 2007 and Federally Taxable General Obligation Notes, Series B of 2007, rated Aa3. Last rating action: 5/19/2008.
-- Connecticut Taxable General Obligation Bonds (Teachers' Retirement Fund 2008 Series A, B and C - Current Interest Bonds), rated Aaa. Last rating action: 2/12/2009.
-- Florida Hurricane Catastrophe Fund (CAT Fund) Finance Corporation Floating Rate Notes, Series 2007A, rated Aa1. Last rating action: 7/9/2008.
-- Haverstraw (Town of) NY. Urban Renewal Serial Bonds, Series 2008A (General Obligation -- Federally Taxable), rated Aa1. Last rating action: 5/2/2008.
-- Illinois General Obligation Bonds, Pension Funding Series of June 2003, rated Aaa. Last rating action: 10/28/2008.
-- Kansas Development Finance Authority Revenue Bonds, Series 2004C (Kansas Public Employees Retirement System), rated Aaa. Last rating action: 9/9/2008.
-- Kern County Water Agency Imp. Dist. 4, CA Water Revenues Certificates of Participation (Improvement District No. 4) Series 2008B (Federally Taxable), rated Aa1. Last rating action: 2/29/2008.
-- Lebanese American University Taxable Bonds, Series 2007, rated A3. Last rating action: 2/5/2008.
-- Michigan Municipal Bond Authority School Loan Revolving Revenue and Refunding Bonds (Federally Taxable), Series 2008A-1 Taxable Bonds, Series 2008A-2 Taxable Bonds, Series 2008A-3 Taxable Bonds & Series 2008A-4 Taxable Bonds, rated Aaa. Last rating action: 3/19/2008.
-- The Nature Conservancy Extendible Notes, rated Aa1. Last rating action: 5/5/2008.
-- New Jersey Economic Development Authority Business Employment Incentive Program Series A and B, rated Aa1. Last rating action: 5/21/2008.
-- New Jersey Sports and Exposition Authority State Contract Bonds Sub-Series 2007 B1, 2, & 3 and Series 2008 Series A Refunding Bonds, rated Aa1. Last rating action: 4/18/2008.
-- Oregon General Obligation Pension Bonds, 2003 Series, rated Aaa. Last rating action: 1/27/2009.
-- Port Authority of New York and New Jersey Series 150th, Taxable Bonds, rated Aa1. Last rating action: 11/26/2008.
-- Puerto Rico Employees Retirement System Senior Pension Funding Bonds, Series A and B, rated A1. Last rating action: 6/23/2008.
-- Purdue Research Foundation, IN, Taxable Bonds, Series 2007, rated Aaa. Last rating action: 12/7/2007.
-- Sacramento County, CA, Taxable Bonds, Series 2008 (Taxable Pension Funding Bonds. Ref.), rated Aa1. Last rating action: 3/13/2008.
-- San Francisco (City and County of) Taxable General Obligation Refunding Bonds, Series 2008R-2, rated Aaa. Last rating action: 8/4/2008.
-- St. Louis Municipal Finance Corporation, MO, Series 2007 (Taxable) Leasehold Revenue Bonds, rated Aa3. Last rating action: 11/6/2008.
-- Tulsa Public Facilities Authority, OK, Capital Improvements Revenue Bonds, Taxable Series 2008, rated Aa1. Last rating action: 3/31/2008.
-- University of Miami Revenue Bonds Series 2007C, rated Aa3. Last rating action: 3/23/2008.
-- University of Pittsburgh Medical Center (UPMC) Interest Rate Swaps related to Series 2007 A-1, A-2, B-1 and B-2, rated Aa1. Last rating action: 12/12/2008.
-- University System of New Hampshire Series 2007 Taxable Bonds, rated Aa1. Last rating action: 3/20/2008.
