Municipal Market Advisors (MMA) has released data that suggests Standard & Poor’s (S&P) ratings, while generally higher than Moody’s and Fitch, are not inaccurate. This data speaks to the growing concern over S&P’s new methodology implemented last year when calculating ratings. The data suggests that while S&P ratings have been higher, they are not inaccurate and are supported by market research.
MMA suggests that the rate increases are a product of recovery from the Great Recession. The firm suggested that overall, there is a slower pace of ratings downgrades in the market, and there may be an increase in Moody’s ratings in the future. This research is counter to concerns raised among investors and market insiders.
Fears regarding rate shopping also appear to be addressed in the data, which illustrates that Moody’s and Fitch have seen an increase in market share over the last year.