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government sectors.” 116 S&P then continued a pattern in which it upgraded numerous municipal credits.117 This was reflected in November 2009 S&P release stating, as follows118— Despite tough economic times, the number of U.S. municipalities with ‘AAA’ ratings has more than doubled since early 2008, to 169. A total of 86 communities joined this group in the 18 months through August 2009. The large increase reflects ongoing modifications to Standard & Poor’s Ratings Services’ criteria …, and our view of the economic, financial, and managerial strength of these municipalities. Of the new entrants, 65 were upgraded from our 'AA' rating category, while the debt of 21 communities was initially rated ‘AAA’. At the end of 2009, “[r]esponding to calls from various regulators for rating agencies to be more transparent in their practices,” Fitch Ratings published “new rating
116
Standard & Poor’s Public Finance, “Standard & Poor’s Reaffirms Its Commitment To The Goal Of Comparable Ratings Across Sectors And Outlines Related Actions” (May 6, 2008).
117
Preston and Richard, “Municipal Upgrades by S&P Show Inappropriate Scale (Update1)” (Bloomberg.com Dec. 4, 2008) (quoting Matt Fabian, managing director at Municipal Market Advisors, as stating “They’re conceding that they’ve been rating these municipalities inappropriately… . The whole thing is very curious.”); Shields, “S&P Boosts Water, Sewer Issuers, Thanks to New Criteria” (Bond Buyer Online Dec. 31. 2008).
118
Standard & Poor’s, “RatingsDirect—Sector Review: The Ranks Of ‘AAA” Municipalities Swell Despite Hard Times” (Nov. 3, 2009).