S&P Posts VRDO Ratings Recap
S&P published a "VRDO Ratings Recap," which says, "S&P Global Ratings is providing a comprehensive summary of its ratings on variable-rate demand obligations (VRDOs) related to municipal and corporate obligors. The data consist of all outstanding ratings as of August 1, 2017. We have 2,228 outstanding ratings on VRDOs with an outstanding par balance of $69.57bn. Overall, 99.2% of the ratings fall within the 'AAA', 'AA', and 'A' rating categories, with the highest total par at the 'AA−' level (22.5%). We took rating actions on 19 issues on the portfolio in 2017, which consisted of 11 upgrades of one notch, two affirmations, and six CreditWatch negative placements. We expect issuance levels to be in-line with 2016 levels for the remainder of the year. Despite the recent outflows from institutional investors in tax-exempt funds after money market reform, demand from competing funds remains high amid continued low VRDO supply. Prolonged low rates, as well as the current regulatory environment, make direct bank financing an attractive option for obligors. However, VRDOs continue to remain relevant due to their high quality and liquidity attributes." S&P lists its "Top 10 LOC (Letter of Credit) Providers as: Bank of America N.A. (14.65% of Total), JPMorgan Chase Bank N.A. (9.75%), Wells Fargo Bank N.A. (8.63%), U.S. Bank N.A. (7.55%), TD Bank N.A. (6.22%), Citibank N.A. (6.18%), Sumitomo Mitsui Banking Corp. (5.75%), MUFG Union Bank N.A. (5.15%), Barclays Bank PLC (2.92%), and PNC Bank N.A. (2.85%).
