Abstract: States have not been impervious to disruptions in the credit markets in the past year despite their generally solid credit profiles. Many states with auction-rate securities have had to reposition or restructure their outstanding debt as demand in that market evaporated. More than $10 billion of state-related debt has been restructured. The use of derivatives continues to be part of the overall debt strategy for many states and the disruptions in the credit markets have also caused a handful of states to terminate a number of their swaps. Fortunately, most states were relatively conservative with the structuring of their variable-rate securities and had proactively developed plans to reposition their debt with minimal financial impact up to this point. Still, state

Brief Excerpt: RESEARCH Ratings Definitions U.S. Public Finance Report Card: States Weather Credit-Market Disruptions, But Are Likely To Step Up Borrowing As Economy Slows Publication date: 14-Jul-2008 Primary Credit Analyst: Robin Prunty, New York...

Report Type: Commentary
Sector: Global Issuers, Public Finance, Structured Finance
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 S&P Credit Research
S&P Credit Research provides analysis on issuers and debt obligations of corporations, states and municipalities, financial institutions, insurance companies and sovereign governments. S&P also offers insight into the credit risk of structured finance deals, providing an independent view of credit risk associated with a growing array of debt-securitized instruments.