NEW YORK--()--Modest economic recovery in 2012 helped to stabilize credits across U.S. public finance in 2012, according to Fitch Ratings in a new report.
For all U.S. public finance sectors in aggregate, the number of upgrades and downgrades decreased in 2012 from 2011. Fitch reported 198 downgrades in 2012, a 26% decrease from 2011 (268). Upgrades decreased to 84 in 2012 from 130 in 2011.
The downgrade to upgrade ratio by rating action was 2.4:1, increased from 2.1:1 in 2011. Downgrades have outnumbered upgrades in each of the last four years. Tax-supported ratings accounted for the bulk of the rating downgrades again last year (120, compared to 155 in 2011).
Fitch also reported a decrease in Negative Rating Outlooks, to 232 in 2012 from 306 in 2011. The number of Positive Rating Outlooks also decreased to 61 (from 68 the previous year). Negative Rating Watches increased to 49 from 29, largely driven by changes to Fitch's charter school sector criteria.
It is important to note that downgrades account for a small percentage of total public finance rating actions. The number of ratings that were affirmed constituted the majority of rating actions (82%) during the year. Additionally, 91% of Rating Outlooks were Stable at the end of 2012.
'U.S. Public Finance Rating Actions 2012' is available at 'www.fitchratings.com' or by clicking on the link.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research U.S. Public Finance Rating Actions 2012