Kroll Bond Rating Agency (KBRA) is pleased to announce the publication of its methodology for rating the General Obligation debt of local governments in the United States. This methodology provides a framework for assessing the credit quality of issuers across all states and encompasses a wide diversity in size, character and revenue generating ability. KBRA'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, as well as debt and additional continuing obligations. The ability and willingness of a municipality to pay its General Obligation debt in a timely fashion is a key consideration. KBRA will focus on financial management policies and practices as well as demonstration of management's capability and the political leadership's willingness to respond to internal and external pressures.
KBRA's analysis combines both qualitative and quantitative factors and the rating opinion is based on an 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. Our ratings of local government General Obligation debt will incorporate both an assessment of the relative credit strength of the issuer as well as an assessment of the absolute risk of default.
For more complete details on the analysis, please see our report, U.S. Local Government General Obligation Methodology, published today at www.krollbondratings.com.
Kroll Bond Rating Agency
Kate Hackett, 646-731-2304
Thomas Randazzo, 917-281-3275
Brittni Smith, 917-281-3271