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The Week in Public Finance: What the Aging Population Means for State Finances [Governing]

A Credit Ratings Echo Chamber?

In the years following the Great Recession, the municipal market saw a rise in what's called a split rating where two credit agencies issue a different rating for the same municipal credit. Now, reports Municipal Market Advisors, that trend is on the decline: Spilt ratings account for about 41 percent of outstanding bond debt, down from 46 percent in 2015.

But it's not necessarily because rating agencies are agreeing more. Rather, it's more likely due to the issuer trend of obtaining fewer ratings on new issues. Previous research from Municipal Market Advisors has found that through the first five months of this year, 25 percent of bond sales have involved just one credit rating. That's far higher than the 13 percent rate a decade ago.

Tim Holler