A few months ago, Fitch Ratings released a report that said that ratings scales for tax-supported water- and sewer-revenue bonds would be revised, and that public finance sectors like healthcare were officially under review. Now, Fitch has announced that it would delay plans to revise its municipal ratings until 2009, given what it called the"extraordinary turmoil in the global financial markets." The announcement leaves healthcare managers somewhat in limbo, wondering when they'll be safe getting back into the financial markets.
Fitch is working on changes that will address whether constrained market access and associated market turmoil have had an impact on overall municipal credit quality, or on any particular subgroup.
In the meantime, the Federal Reserve has moved to restore confidence in frozen short-term debt markets by setting a plan in motion to buy taxable short-term loans--known as commercial paper--typically used by companies for payroll and operations. The Fed had hoped to calm investors, particularly money market funds, which are particularly prone to short-term investment.
To learn more about Fitch's plans:
- read this Modern Healthcare piece
Crisis may change tax-exempt bond rating system
Fitch: Bad debt fails among for-profit hospitals during Q1 '08