Municipal Bond Ratings
Below is a complete explanation of municipal
bond ratings. There are two major municipal bond ratings
agencies. They are Moody's Investors Service and S&P which
stands for Standard & Poor's. The two respective municipal
bond ratings are called Moody's Municipal Bond Ratings and
S&P Municipal Bond Ratings or commonly known for short as
Ratings and S&P Ratings.
Factors that Help Calculating Municipal Bond
Municipal bonds rating indicates the merit
of municipal bonds which depends on whether the bond is backed
by the full faith, credit, and taxing powers of the
municipality or by revenues generated by the municipal facility
the bond issue finances. Consider issuer-specific information
such as the wealth of the community, characteristic of the
issuer, revenue stream of the project the bond is used to fund.
By examining the municipal bond, you can see if it should have
high ratings or low based on the factors above.
The Importance and Uses of Municipal Bond
When investing in municipal bonds, municipal
bond ratings will help you decide the creditworthiness of the
municipal issuer and how likely you are to be paid back the
principal plus the interest payments that the bond promises.
Both municipal bond ratings agencies use alphanumeric ratings.
You should learn to read the meaning of
ratings for municipal bonds.
Municipal bond rating agencies
including Standard & Poor's, Moody's and
Fitch's evaluate the credit quality of municipal bonds and
publish their municipal bonds ratings, to assist those wanting
to invest tax free.
Revisions of Municipal Bond Ratings
In some circumstances, either or both
Moody's bond ratings or S&P ratings may be revised or
withdrawn entirely. Any such revision or withdrawal of such
bond ratings may have an effect on bond market prices.
Municipal Short Term Note Ratings
The above municipal bond rating agencies not
only rate and publish municipal bond ratings, they also
evaluate and publish the short term municipal note ratings. See
ratings for a list of ratings for short term municipal