...The current credit market dislocation and the longer term expected economic downturn will test municipal issuers long- demonstrated abilities to adapt to credit stress. The economic downturn will stress many municipal issuers and require a broad array of difficult choices, but ma ny governments and enterprises are expected to have the flexibility to adjust to these unique circumstances and to maintain their strong credit ratings. Some issuers ma y be disproportionately impacted by the economic downturn and these issuers co uld experience negative pressure on their long term ratings. Meanwhile, the current turmoil in short- term credit markets has created significant new challenges for many municipal debt issuers. Issuers that rely on market access for short-term financing, that have relatively more exposure to volatile variable rate debt or have significant counterparty exposure could experience downward rating pressure on their long-term ratings. These issuers will...

Report Type: Special Comment
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 Moody's Global Credit Research
Moody's Investors Service, a leading global credit rating, research and risk analysis firm, publishes credit opinions, research, and ratings on fixed-income securities, issuers of securities and other credit obligations. Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Ratings also create efficiencies in fixed-income markets and similar obligations, such as insurance and derivatives, by providing reliable, credible, and independent assessments of credit risk. For issuers, Moody's services increase market liquidity and may reduce transaction costs.