September 1 6 ,2015 . LOCAL GOVERNMENT SECTOR As Good as It Gets Public Finance Downgrades Outpaced Upgrades in Second -Quarter 2015 Another iteration of underlying rating actions w as released by Moody’s on August 3, 2015. The data showed public finance downgrades surpassed upgrades insecond -quarter 2015 .This was in contrast to the first -quarter 2015 results, which very well could be deemed an outlier. Most significantly, the second -quarter upgrade versus downgrade statistics reinforce the importance of credit selection for local government bond investors. The latest data showed 149 public finance sector downgrades insecond -quarter 2015 .This number isdisturbingly in -line with the average number ofdowngrades that occurred just after the Great Recession, when public finance issuers should have been experiencing the highest level of fiscal strain (downgrades average d 157 per quarter from 2009 to 2013). Upon further examination , we found the number ofdowngrades that occurred insecond -quarter 20 15 isstill nowhere close to the 2002 - 2008 average of 55 per quarter .Considering it isnow the third quarter of 2015, six years from the end of the Great Recession, these perpetual downgrades suggest to us that there issomething more than just stress from the Great Recession ailing many public finance issuers. Of the 149 downgrades, 108 (about 70%) were to local governments.
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