Jessalyn Moro, new head of U.S. Public Finance at Fitch Ratings, looks ahead to what the agency will be doing over the next year. She talks about the top credit trends of 2016 and discusses the recent development of rating dispersion such as seen in the Chicago sales tax rating.

MORO: One of the changes the market can expect from Fitch in 2016 is a change in the way that we communicate our credit views for state and local governments. That really has to do with the revised criteria we put out for comment in the fall, and are now finalizing for publication in the first quarter of 2016. That criteria really represents really what Fitch is all about, both innovation and expertise.

Innovation in that we are introducing forward-looking tools to the market, new things that the market hasn't seen before, but always relying on our judgment, our analytical judgment to come to the rating conclusion. Fitch was recapitalized in 1989 and we took the best and the brightest of the market participants at that point, and challenged each other to create better market research. Really, what's happening now is a continuation of that trend, that entrepreneurial spirit really still permeates our culture every day and we are interested in expanding the team to bring new skills to the table so that we can continue to innovate.

I think the first thing to note is that for the first time since the Great Recession, all of our state ratings are on a stable outlook so that really tells us something. Then of course, on the healthcare side we're keeping our eye on that sector as we continue to implement ACA as a country and as a sector. We're very interested in watching how that plays out. We do have a stable rating outlook on the healthcare ratings, but the sector overall remains negative because we do expect some deferred risk associated with that implementation over the longer term.

I also think it's interesting to keep our eyes on the P3 sector. Fitch has been a leader in that market, we remain a leader in that market, and the sector with the adoption of the [unintelligible 00:01:45] Act is really expanding beyond the traditional uses of transportation and housing, and now we would expect a pivot towards water utility financing. I think one thing on the mind of users of our ratings is the recent trend in rating dispersion, where different agencies are arriving at very different rating conclusions for the same exact security most notably the Chicago sales tax rating.

And that really provides an opportunity for Fitch to clearly articulate our rationale for reaching our rating conclusion, and that's what we believe is the best way we can serve the market. Then of course, it's an election year in 2016 and with that there's always a little bit of uncertainty, very interesting to see how that plays out. I'm excited and honored. I'm excited because we have a lot of good work ahead of us, and honored because the team is so strong. Janney Montgomery did an investor survey last year and Fitch really outperformed our competitors across the board, and it only confirms what I've always known.

I've spent my whole career at Fitch, and I'm still excited to come to work every day mainly because we have a really strong team, we've got people who really care about doing good work, and also because Fitch values talent and I would say that I'm an example of that. I've had the great fortune of having really key mentors in my career, without which I really wouldn't be sitting in front of you today.