WHAT ARE THE IMPLICATIONS OF THE CHANGE IN MUNICIPAL BOND RATINGS BY FITCH AND MOODYS?
JIM COLBY, SENIOR MUNICIPAL STRATEGIST/PORTFOLIO MANAGER: The implications are significant, and as both agencies are immediately redeploying their ratings, the impact will be felt both on the issuer side, as well as the investor side. For the issuer, this is great news because the general raising of ratings across the board is going to mean a lower cost for debt issuance. They will have access to a lower cost of capital, and in this economy, that’s a significant improvement. For the investor, it means that any bonds, whether managed professionally or held individually in one’s portfolio, should see over time experience a general raising if not stabilizing of prices during the next six to nine months. HOW MIGHT OBAMA’S HEALTH CARE PLAN AFFECT THE INVESTMENT LANDSCAPE AND MUNICIPALITIES IN GENERAL? JIM COLBY: One of the interesting features of the health care plan will benefit non-profit hospitals in that they will no longer bear the cost burden for the uninsured. This means that there w
