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Global Credit Research - 22 Jun 2012
Approximately $45 billion of debt affected
New York, June 22, 2012 -- Moody's Investors Service has downgraded a total of 1,675
US public finance obligations with ratings that are based in whole or
in part on support provided by one or more of the 15 banks and securities
firms with global capital markets operations that were downgraded yesterday.
Such support includes letters of credit (LOCs), standby bond purchase
agreements, and other liquidity facilities.
On June 21 Moody's announced conclusion of its reviews for downgrade
of 15 banks and securities firms with global capital markets operations.
Please use the link provided below to access Moody's announcement
of these rating actions.
Link to press release dated June 21, 2012 announcing downgrades
of banks and securities firms with global capital markets operations:
http://www.moodys.com/research/Moodys-downgrades-firms-with-global-capital-markets-operations--PR_248989
In connection with the rating actions referenced above, Moody's
has taken the rating actions detailed below.
Obligations rated based solely on support from banks and securities firms
with global capital markets operations
Moody's has downgraded ratings of 1,163 US public finance
sector obligations that are rated based solely on support (in the form
of letters of credit and similar support facilities) provided by banks
and securities firms affected by the credit actions referenced above.
These actions include downgrades of both the long-term and short-term
ratings of 415 obligations, downgrades of the long-term ratings
only of 687 obligations and downgrades of the short-term ratings
only of 44 obligations that do not have long-term ratings.
In addition, Moody's confirmed the LOC backed short-term
ratings of 2 US municipal obligations that were previously under review
for downgrade in connection with Moody's reviews of the banks and
securities firms affected by the actions referenced above.
Details of these rating actions are included in the lists of affected
obligations accessible through the links below which are an integral part
of this press release.
Link to list of affected issues supported by LOCs provided by 14 banks
and securities firms with global capital markets operations:
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_143371
Link to list of affected issues supported by letters of credit provided
by Bank of America:
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_143370
Link to list of affected Custodial Receipts:
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_143372
The principal methodology used in these ratings is Moody's Methodology
for Rating U.S. Public Finance Transactions Based on the
Credit Substitution Approach published in August 2009. Please see
the Credit Policy page on www.moodys.com for a copy of this
methodology.
These ratings will change up or down whenever the rating of the applicable
support provider moves up or down.
Obligations rated based on liquidity support from banks and securities
firms with global capital markets operations
Moody's has also downgraded the short-term ratings of 152
US municipal obligations whose short-term ratings are based on
standby bond purchase agreements and similar 3rd party support facilities
("liquidity facilities") provided by banks and securities
firms affected by the credit actions referenced above. In addition,
Moody's confirmed the ratings of 3 US municipal obligations whose
short-term ratings are based on liquidity facilities that were
previously under review for downgrade in connection with Moody's
reviews of the banks and securities firms.
The short-term ratings discussed in this announcement are based
primarily on the short-term ratings of the entity providing liquidity
support. Because credit events relating to the underlying obligor
can result in termination of liquidity facilities without investors having
the opportunity to tender their bonds, the short-term ratings
based on 3rd party liquidity support also reflect the credit of the underlying
obligor or obligation.
Details of these rating actions are included in the list of affected obligations
accessible through the link below which is an integral part of this press
release.
Link to list of Affected Issues Supported by Standby Bond Purchase Agreements:
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_143373
The principal methodology used in these ratings is Moody's Methodology
for Rating Variable Rate Instruments Supported by Third-Party Liquidity
Providers published November 2006. Please see the Credit Policy
page on www.moodys.com for a copy of this methodology.
These ratings will change up or down whenever the short-term rating
of the entity providing liquidity support moves up or down. In
addition, they may move down when the rating of the underlying obligor
moves down.
Tender option bonds with liquidity support from banks and securities firms
with global capital markets operations
Moody's has also downgraded the short-term ratings of 137
series' of tender option bonds ("TOBs") supported by
3rd party liquidity facilities provided by banks and securities firms
affected by the credit actions referenced above. In addition,
Moody's downgraded the long-term ratings of 40 Series'
TOBs where the underlying asset is a custodial receipt that is rated based
on support provided by a bank or securities firm listed in the announcement
referenced above.
These ratings are based primarily on the short-term ratings of
the entity providing liquidity support. Because credit events relating
to the asset underlying the TOB can result in termination of liquidity
facilities without investors having the opportunity to tender their bonds,
short-term ratings based on 3rd party liquidity support also reflect
the credit of the underlying asset.
Details of these rating actions are included in the list of affected obligations
accessible through the link below which is an integral part of this press
release.
List of affected Tender Option Bonds:
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_143375
The principal methodology used in these ratings is Moody's Methodology
for Rating Variable Rate Instruments Supported by Third-Party Liquidity
Providers published November 2006 and Moody's Rating Methodology
for Tender Option Bonds published September 2005. Please see the
Credit Policy page on www.moodys.com for copies of these
methodologies.
These ratings will change up or down whenever the short-term rating
of the bank providing liquidity support moves up or down. In addition,
they may move down if the rating of the underlying asset moves up or down.
Obligations supported by letters of credit and rated based on a joint
default analysis
In connection with the downgrades of banks and securities firms with global
capital markets operations referenced above, Moody's has downgraded
the ratings of 223 LOC supported U.S. public finance sector
obligations the long-term ratings of which are based on a joint
default analysis ("JDA"). These actions include downgrades of both
the long-term and short-term ratings of 41 obligations,
the long-term ratings only of 43 obligations and the short-term
rating only of 139 obligations.
Details of these rating actions are included in the list of affected obligations
accessible through the link below which is an integral part of this press
release.
Link to list of affected transactions the long-term ratings of
which are based on a joint default analysis:
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_143367
The long-term JDA rating on each of these debts reflects Moody's
approach to rating jointly supported transactions and takes into account
(i) the long-term rating of the applicable bank as letter of credit
provider, (ii) the underlying rating assigned to the applicable
obligation, and (iii) the default dependence between the support
provider and borrower. Short-term ratings of these obligations
are based solely upon the short-term rating of the applicable bank
as provider of the letter of credit.
What Could Change the Ratings-Down
Long-term JDA ratings: The long-term rating for each
transaction could be downgraded if the long-term rating of the
applicable support provider or the long-term rating of the underlying
obligation is downgraded or if there is an increase in the default dependence
between the applicable borrower and the support provider.
Short-term ratings: The short-term rating on the applicable
transaction will be downgraded if the short-term rating of the
applicable support provider is downgraded.
What Could Change the Ratings-Up
Long-term JDA ratings: The long-term rating for the
applicable transaction could be upgraded if the long-term rating
on the applicable support provider or the long-term rating of the
underlying bonds is upgraded or (if the default dependence is greater
than low) there is a decrease in the default dependence between the applicable
borrower and the support provider.
Short-term ratings: The short-term rating on the applicable
transaction will be upgraded if the short-term rating of the applicable
support provider is upgraded.
The principal methodologies used in these ratings are Applying Global
Joint Default Analysis to Letter of Credit Backed Transactions in the
US Public Finance Sector published in October of 2010 and Moody's
Methodology for rating US Public Finance Transactions Based on the Credit
Substitution Approach published in August 2010. Please see the
Credit Policy page on www.moodys.com for copies of these
methodologies.
REGULATORY DISCLOSURES
The Global Scale Credit Ratings on this press release that are issued
by one of Moody's affiliates outside the EU are endorsed by Moody's
Investors Service Ltd., One Canada Square, Canary Wharf,
London E 14 5FA, UK, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that has issued a particular Credit Rating is available on www.moodys.com.
For ratings issued on a program, series or category/class of debt,
this announcement provides relevant regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides relevant regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides relevant regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Information sources used to prepare each of the ratings are the following:
parties involved in the ratings, and public information.
Moody's considers the quality of information available on the rated
entities, obligations or credits satisfactory for the purposes of
issuing these ratings.
Moody's adopts all necessary measures so that the information it
uses in assigning the ratings is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
The below contact information is provided for information purposes only.
Please see the issuer page on www.moodys.com for Moody's
regulatory disclosure of the name of the lead analyst and the office that
has issued the credit rating.
Please see the ratings disclosure page on www.moodys.com
for general disclosure on potential conflicts of interests.
Please see the ratings disclosure page on www.moodys.com
for information on (A) MCO's major shareholders (above 5%) and
for (B) further information regarding certain affiliations that may exist
between directors of MCO and rated entities as well as (C) the names of
entities that hold ratings from MIS that have also publicly reported to
the SEC an ownership interest in MCO of more than 5%. A
member of the board of directors of this rated entity may also be a member
of the board of directors of a shareholder of Moody's Corporation;
however, Moody's has not independently verified this matter.
Please see Moody's Rating Symbols and Definitions on the Rating Process
page on www.moodys.com for further information on the meaning
of each rating category and the definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com
for the last rating action and the rating history.
The date on which some ratings were first released goes back to a time
before Moody's ratings were fully digitized and accurate data may not
be available. Consequently, Moody's provides a date that
it believes is the most reliable and accurate based on the information
that is available to it. Please see the ratings disclosure page
on our website www.moodys.com for further information.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Thomas Jacobs
VP - Senior Credit Officer
Public Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Timothy Blake
Managing Director
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's downgrades US muni obligations backed by banks and securities firms with global capital markets operations
No Related Data.
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