They say that the more things change, the more they stay the same. And that can be said for David Hitchcock, who celebrates 40 years at S&P Global Ratings as a municipal bond analyst.
He has seen a plethora of changes over the years, but the core focus of his work has remained the same — in-depth and timely credit analysis of municipal bond issues.
Hitchcock, an S&P senior director in the state group, grew up in a small town in Connecticut and went to Williams College in Williamstown, Mass., where he received his bachelor’s degree with a major in physics.
After school and a summer training to be an Olympic rower, he began his finance career in 1978 as an associate at E.F. Hutton’s municipal bond research department.
In 1980, he came to S&P as a muni bond analyst. Currently, he is involved in state ratings and rating committees and serves as an analyst for major states, chairing rating committees, writing sector commentary and is an analytical leader for state priority lien debt.
Previously, he was in the state and local government group and was sector leader for pension and other post-employment benefits issues, charter schools, special tax and special district bonds. And before that, he worked in the special revenue group with higher education, airport, toll roads, foundations, and enterprise systems.
"In Dave’s 40-year work history with S&P, he has seen it all, opining on credit through up and down economic cycles," said Sussan Corson, a senior director at S&P. "We feel lucky to work with Dave and value the instrumental credit insight and leadership that he brings to the team.”
Over the years has seen many changes — ranging from the technology that marks the way firms do business to diversity and inclusion that affect who does the business to the regulations that govern how municipalities and companies do business.
He began his career in 1980, when interest rates were nearly 22%, the inflation rate was almost 14% and the Dow Jones Industrial Average hovered around the 950 level.
“If someone had told me 40 years ago that we could go over 10 years without a recession I wouldn’t have believed them,” he told The Bond Buyer. “Analysts hired 10 years ago have never seen what a recession is like. When I started out, inflation was a big seemingly permanent issue —now it’s nonexistent.”
He noted that 40 years ago “I started out wearing suits every day and now blue jeans are acceptable,” adding that there were also no computers in the office and no regional rating agency offices.
But the biggest change he has seen in the muni bond industry is in the area of the regulation.
“Back then, when I started, I was probably spending 90% of my time doing analysis and 10% doing record keeping and now it’s probably closer to 40% record keeping and 60% analysis.”
He said he included procedures in there and noted that S&P has a compliance department that wasn’t in existence when he first started.
He added that business relationships have also changed and that they had to be very cognizant of external relationships and potential conflicts of interest.
“We weren’t regulated back then. Now we are,” he said. “We have to be very careful about interactions apart from the rating meeting. It’s much more formal. It was very different back then.”
He said there are about 200 analysts now at S&P, spread across the country in regional offices, up from fewer than 30 in New York when he started.
“The reason we now have so many more analysts is that we have so much more issuance,” he said referring to the rise in muni volume over the past 40 years.
“Dave is passionate about the municipal business. His aptitude for details has no limits. He combines that specific knowledge with an appreciation of the macroeconomic factors,” said John Hallacy, contributing editor at The Bond Buyer and a former colleague of Hitchcock at S&P. “He has been a participant in some of the most challenging events in the market over the course of his tenure. Most would say he has been fair. He has represented S&P very well indeed.”
Hitchcock said he often traveled to meet issuers who the agency rated. He recounted one trip that he almost didn’t come back from.
“I was working on a water and sewer deal for a small issuer in South Carolina and they insisted on taking me on a small plane tour of every place where they had facilities,” he said. “And a thunderstorm came in and they insisted on going up in the middle of the thunderstorm and I think it was the most scared that I ever was in my life. We were bouncing around and there was lightning all around us. I thought I was going to die.”
He remembered a few other interesting rating trips he went on.
“One memorable trip I had was to one of the nation’s largest coal mining strip mines in Wyoming. The tires alone on the trucks used to haul the coal were more than twice my height. The mine blasting was similar to an aerial bombardment,” Hitchcock said. “Another trip was for a Navajo nation coal severance tax financing (which never did sell). We talked with the tribal leader and took an all-day tour of their reservation in the four corners region in Arizona, including a personal tour of remote very very off-road pueblo ruins in the De Chelly Canyon area.”
He added that there were also many other specialized charter school rating trips that were interesting, including one configured around "equine science" and another for high school dropouts that had a car mechanics shop, a beauty school, and day care for students’ children.
“I love working with Dave," said Eden Perry, head of U.S. public Finance at S&P. "It is fun to work with someone who challenges you intellectually and knows his credits inside and out. We are very lucky to have him on our team.”
Hitchcock is a past chairman of the Municipal Analysts Group of New York and has served on the board of the National Federation of Municipal Analysts, which gave him a meritorious service award in 2002.
He has served on the U.S. Comptroller General’s Advisory Council on Government Auditing Standards. He has also been a recipient in numerous years of Smith’s Research and Ratings Review’s analyst all-star team awards. He also has spoken at many conferences and written numerous articles for publications including The Bond Buyer and City and State magazine.
Looking ahead, Hitchcock said he is looking forward to encountering new experiences at S&P and mentoring a new crop of upcoming credit analysts.
