Bond ratings: a clarification
January 23, 2003 | Read Time: 1 minute
To the Editor:
I would like to make a clarification concerning the list of Moody’s nonprofit bond ratings that appears in your December 12 issue (“Report Predicts Debt Woes for Charities”). As we state in our report, “Not-for-Profit Institutions Have Mixed Credit Outlook,” these ratings are “underlying ratings based on the institution’s own credit quality.” That means that the ratings are based on the institutions’ own financial capability to repay debt.
Many of the bonds issued by the institutions listed also have Aaa ratings — the top Moody’s bond rating — because the bonds are insured by a third party that has an Aaa rating. The insurance raises the effective bond rating of an insured institution.
Naomi Richman
Senior Vice President and Team Leader
Higher Education and Other Nonprofit Ratings
Moody’s Investors Service
New York
