Thursday, September 11, 2008

Cook dumps Fitch after downgrade

Crain's:
The Wall Street ratings agency that two months ago reduced the outlook for $3 billion in Cook County debt is apparently in line for payback from the Stroger administration.

Sources said Fitch Ratings and its opinion were omitted in documents outlining a pending $750-million county bond issue and circulated Wednesday to County Board members.

In the wake of the county’s sales tax increase on July 1, Fitch Ratings dropped its outlook for county debt from “stable” to “negative,” foreshadowing a rating downgrade that would increase the county’s costs of borrowing.

Melanie Shaker, Fitch’s lead analyst of Cook County debt who issued the warning in July, said, “We stand by our rating action and our change in the rating outlook.” The company wouldn’t comment further.
...
Fitch cited weakening county finances, structural deficits in the county’s massive health system and “an increasingly high-tax environment for retail sales in a down economy. 

Debt issuers like Cook County pay rating agencies to review their credit worthiness, hoping to win favorable judgments that will influence potential buyers of the debt. 

Cook County debt also is rated by Moody’s Investors Service and Standard & Poor’s, which in July each affirmed a stable outlook for the county's general obligation debt.
What can I say they didn't like the firm's opinion about the state of county government.

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