Wednesday, August 10, 2011

S&P Cuts AAA Ratings on Thousands of Municipal Bonds

Standard & Poor’s lowered the AAA ratings of thousands of municipal bonds tied to the federal government, including housing securities and debt backed by leases, following its Aug. 5 downgrade of the U.S., reports Bloomberg.

The rating company assigned AA+ scores to securities in the $2.9 trillion municipal bond market including school- construction bonds in Irving, Texas; debt backed by a federal lease in Miami; and a bond series for multifamily housing in Oceanside, California. Olayinka Fadahunsi, an S&P spokesman, said he couldn’t provide a dollar figure on the affected debt.

Be very careful holding muni-bonds. A downgrade of a muni debt can be very costly in terms of interest rates for some of these municipalities---some of them, on their own, already are substandard credit risks.

5 comments:

  1. Did you notice the date within the URL (2011-08-07)? It's from Sunday, a full day before the public announcement. Who else knew of the downgrade before the public announcement?

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  2. Is this the buy signal for stocks?

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  3. Get the Government out of our schools. De-fund the NEA, and selloff the buildings to private education.

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  4. I'm sure Meredith Whitney is smiling, and she has the right to considering the hit jobs on her after she exposed the Muni's to the sheeple in MSM late last year.

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  5. Consumer Report just removed the Honda Civic from their "Recommended" list. I think the Consumer Report executives should be arrested!

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