Fitch Ratings notes that during the fourth quarter of 2012 (4Q'12) and for the 16th consecutive quarter, U.S. public finance rating downgrades outnumbered upgrades. Both the number of upgrades and downgrades decreased from 3Q'12.
Negative actions are expected to remain elevated, as Negative Rating Outlooks exceeded Positive Rating Outlooks (3.8:1) in 4Q'12. However, a vast majority of rating actions (84%) during the fourth quarter were affirmations, with no change in Rating Outlook or Rating Watch status. Furthermore, 91% of ratings had a Stable Rating Outlook at the end of the fourth quarter.
Downgrades still account for a small percentage of total public finance rating actions. Fitch downgraded 41 credits, which represented approximately 5.2% of all rating actions and $31.9 billion in par value. In 3Q'12, Fitch downgraded 54 credits. Fitch upgraded 15 credits in the fourth quarter, which represented 1.9% of all rating actions and $7 billion in par value. In 3Q'12, Fitch upgraded 22 credits.
The full report 'U.S. Public Finance Rating Actions for Fourth Quarter 2012' summarizes these rating actions by sector and can be found at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: U.S. Public Finance Rating Actions Fourth-Quarter 2012