Kroll Bond Ratings begins ratings for U.S. local government G.O. debt

By Toni Weeks

San Diego, June 1 - Kroll Bond Rating Agency has published the methodology it will use to begin rating the general obligation debt of local governments in the United States, according to a press release.

According to the release, Kroll's analysis includes a comprehensive view of a municipality's governance and management structure and policies, municipal resource or economic base, financial performance and liquidity, debt and additional continuing obligations. Kroll will focus on financial management policies and practices as well as the capability of the management and the willingness of political leadership to respond to internal and external pressures.

A key consideration in the ratings process is the ability and willingness of a municipality to pay its G.O. debt in a timely fashion, the company said.

Kroll's analysis will combine both qualitative and quantitative factors. The rating option is based on the assessment of the municipality's overall credit strength in the context of the statutory framework for fiscal management and debt issuance in a particular state, and its ratings of local government G.O. debt will take into account the relative credit strength of the issuer as well as an assessment of the absolute risk of default.

The New York-based company is a nationally recognized statistical rating organization and a credit rating provider.

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