“Moody’s Places AAA Ratings Of 177 U.S. Public Finance Issuers On Review For Possible Downgrade Due To Review Of U.S. Government’s AAA Rating”

By Washington’s Blog

Moody’s announced today:

Moody’s Investors Service has placed under review for possible downgrade the Aaa ratings of 177 public finance credits, affecting a combined $69 billion of outstanding debt. The credits include 162 local governments in 31 states, 14 housing finance programs and one university. A complete list of affected securities and additional analysis is available at www.moodys.com/USRatingActions.

These actions relate to Moody’s July 13 decision to place the Aaa government bond rating of the United States under review for downgrade, and reflect the rating agency’s assessment that some Aaa public finance ratings would likely be indirectly affected by potential credit deterioration of the sovereign.


In a previous action on July 19, Moody’s placed the ratings of five Aaa U.S. state governments under review for possible downgrade, affecting approximately $24 billion of general obligation and related debt. Those states are Maryland, New Mexico, South Carolina and Tennessee and the Commonwealth of Virginia.

The entities on down grade watch include:

  • The Colorado Housing and Finance Authority’s Single Family Mortgage Bonds and the Single Family Program Bonds, 2009 Class I
  • Idaho Housing and Finance Association’s Single Family Mortgage Senior Bonds, Series 1996B, Series 1996C, Series 1998D, Series 1999F, Series 1999-I*, Series 2000A, Series 2000C, and Series 2000D
  • Kentucky Housing Corporation’s Housing Revenue Bonds
  • Utah Housing Corporation’s Single Family Mortgage Senior Bonds, Series 1998G, Series 2000A and NIBP

  • The University of Washington
  • The Smithsonian Institution

Given that Moody’s and Standard & Poor both say that they’ll likely downgrade U.S. credit even if a debt ceiling deal is reached, it’s looking dire for the above-described entities and bond issues.

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  1. Hugh

    The ratings agencies are nothing more than agents of the kleptocrats. Those who run them and work at them should be in prison. It looks like this is all about providing a rationale to raise rates and so pressure local and state government into privatizing, that is selling off their assets to the kleptocrats. At the federal level it keeps the possibility of slashing Medicare, Medicaid, and Social Security on the table.

    Seeing our own elites in action helps me understand their fate in the French and Russian Revolutions.

  2. G3

    Dean Baker on why the downgrade threat is downright phony :

    In short, the basket case banks that are wards of the state will die in case of a downgrade.

    And another good one :

    This is not to discount the possibility that it will be used as a gun to the head of those “rogue” democrats who oppose cuts to social programs , to bring them in line.

  3. attempter

    Since the very existence of globalization in general and financialization in particular depend upon US muscle, military and finance-economic, isn’t this downgrade threat just a suicide threat on the part of what little is left of the credibility of the CRAs? Who’s really going to give credence to such a downgrade?

    Sure, the real intent is to trigger interest rate increases which will redound to the banksters’ benefit; every detail of this is straight Shock Doctrine.

    But how is this is supposed to play well on Main Street? It seems like a mutual trashing of credibility on the part of both the government and the whole ratings regime (which the people should have rejected long ago).

    Meanwhile it’ll knock away yet another zombie prop within the system. Investors desperately still want to believe these ratings have some substantive meaning. But if the US government of all things isn’t AAA, then who can take that to mean anything other than that the ratings are meaningless, or else that the entire system is untenable and will collapse sooner rather than later?

    1. citizendave

      The future is, ultimately, unpredictable. Having blown their reputations in 2008, the ratings agencies struggle for relevance. They hope their prophecies will be self-fulfilling, or that the markets will fulfill their prophecies. If the US could be tricked into default, the prize for the looters would be great. If we have freedom, we can defy those who would have us destroy ourselves. But if the full faith and credit of the US would be dissolved, then the thin veneer of civilization could be peeled back, and the wild animals could be set loose.

      1. attempter

        If you think the US government is on the side of civilization, you’re badly misunderstanding the situation.

        Setting the wild animals loose is US policy. This government’s one and only policy. For that matter, the two Washington gangs are among the wildest animals.

        (I apologize for insulting regular animals. Today’s subhuman economic and political elites are post-civilizational barbarians, barbarians of descent into the abyss.)

  4. Cedric Regula

    I thought ratings may be a relative thing (rather than absolute) but I wasn’t sure.

    But it’s pretty obvious if t-bills turn to glue… we’s got trouble in da hood.

  5. Peter T

    Shouldn’t Moody and the other rating agencies downgrade every bank in the US – a bank cannot be a better credit risk than its government, as it might need a bailout? The US government should make that rule a law in America, and the customers of the rating agencies will see to it that the US rating is not decreased.

    1. justpassinthru

      In a sane world, yes, but not in this one.

      The whole point is for the banks to become supra-national, indeed, supra-global, where only the ‘law’ of money rules. They are pretty darn close already.

      It is no accident that our country has a much more pervasive economic, might-makes-right, mentality. It has been engendered in us over the years to lead up to all of this nonsense, that never would have seen the light of day just 20 yrs ago.

      The cradle of western democracy is being carved and divvied up by these entities, as if some sort of ‘payback’ for what they started so many years ago.

  6. Middle Seaman

    Whether the rating agencies scare tactics will materialize or not, it is clearly politically motivated and like their big political daddy, i.e. GOP, they are willing to take the country down with them in order to prevail.

    That’s the price we pay for having the disastrous couple Obama/Geithner praying 10 times a day to their Wall Street bosses. Had the couple acted against the Raters in 2009, we would be sailing the Potomac with complete ease.

  7. Jersey Girl

    These are the same agencies that gave subprime mortgages AAA ratings?

    The fact that these institutions are throwing around threats in this charade of a debt crisis is a disgrace.

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