NEW YORK - In a new study analyzing the rating migration of U.S. public finance securities, Fitch notes that the over the period 1999-2010, the agency has recorded 11 U.S. public finance defaults, including one in 2010. The health care sector contributed all but two of the Fitch-rated defaults through 2010, including the sole 2010 default.
The average annual default rate on Fitch-rated U.S. public finance securities through 2010 stood at 0.04% with the investment grade default rate averaging 0.01% per annum and the speculative grade rate 2.0%.
Pressure on U.S. public finance credit quality persisted in 2010. The share of ratings downgraded, 6.5%, topped the share upgraded, 4.3%, by a margin of 1.5 to 1, which was in line with 2009 results.
The distribution of Fitch's U.S. public finance ratings reflects their low propensity to default, with the vast majority of securities rated investment grade. At year-end 2010, the distribution by broad rating category was AAA 14%; AA 52%; A 24%; BBB 8%; and 2% across the non-investment grade categories.
Fitch's new study provides data and analysis on the performance of Fitch's U.S. public finance ratings in 2010 and over the long term, covering the period 1999-2010. The report provides summary statistics on the year's key rating trends.
