WASHINGTON — Starting Monday, two of the three major rating agencies will post muni bond ratings for free on the Municipal Securities Rulemaking Board’s EMMA web site, the MSRB said Monday.
The ratings, provided by Fitch Ratings and Standard & Poor’s, will appear on EMMA for all individual municipal securities that have ratings assigned by either of the two agencies.
“Displaying current ratings for municipal securities on EMMA will put additional information in the hands of investors to help them review the features and merits of individual bonds,” said Lynnette Hotchkiss, the MSRB’s executive director.
Standard & Poor’s participation comes as a surprise, since the agency had initially opposed posting its ratings on EMMA. Last year, in a comment letter filed with the Securities and Exchange Commission, Standard & Poor’s said providing such information at no charge was “commercially untenable” and would not appropriately account for the value of its intellectual property.
But in a statement Monday, Standard & Poor’s said it was “delighted” to join the EMMA project.
“We understand the importance of providing transparency to the marketplace by making our rating opinions easily accessible to the public,” said Bill Montrone, the agency’s managing director and head of U.S. public finance ratings.
Fitch, which agreed to participate last fall, also issued a statement touting the initiative.
“We are pleased Fitch’s municipal ratings will shortly be available via EMMA and we appreciate the constructive work the MSRB has undertaken to bring this important project to its completion,” said Dan Champeau, group head of U.S. public finance and global infrastructure and project finance for Fitch.
In an interview, a spokesman for Moody’s Investors Service, the lone holdout among the three rating agencies, did not signal any change in the agency’s position.
“We’re continuing to evaluate the proposal,” said Michael Adler, vice president for corporate communications.
Issuers welcomed news of Standard & Poor’s participation, with Fitch, and prodded Moody’s to join them.
“We should have all three rating agencies on board and it should be universal,” said Frank Hoadley, Wisconsin’s capital finance director and a member of the Government Finance Officers Association’s governmental debt management committee.
Another issuer agreed.
“It’s obviously good news,” said Eric Johansen, treasurer of Portland, Ore., and chair of GFOA’s debt management committee. “But we really need to have all three involved.”
Johansen and Hoadley noted that, under SEC Rule 15c2-12, issuers must file event notices on EMMA for rating changes, and would presumably need to continue to monitor Moody’s for downgrades or other changes since Moody’s has not agreed to place such information on EMMA.
Last month, Hotchkiss said it could take another year to incorporate the ratings of any other rating agencies not already committed to the project, given the information-technology resources and testing required to supply such data.
In a statement Monday, she said: “Fitch and S&P are leaders in this project and we certainly hope that other rating agencies will follow suit.”