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Text-S&P-Fed budget deal may affect state, local credit
(The following statement was released by the rating agency.)
SAN FRANCISCO (Standard & Poor's) Aug. 18, 2011--The federal Budget Control Act of 2011 (BCA) could have an effect on Standard & Poor's view of municipal credit quality, according to a report, "State And Local Governments Face Fiscal Challenges Under Federal Debt Deal," published today by Standard & Poor's Ratings Services.
"In our opinion, the longer-term deficit reduction framework adopted as part of the BCA could undermine the already fragile economic recovery and complicate aspects of state and local government fiscal management," said credit analyst Gabriel Petek. "Either of these outcomes could potentially weaken our view of certain individual credit profiles of obligors across the sector."
However, said Mr. Petek, "given the disparate nature of state and local economies, differing levels of reliance on federal funding, and varying management capabilities throughout the U.S., we anticipate the effects on credit quality from the BCA will likely be felt unevenly across the sector." The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to email@example.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided. Primary Credit Analysts: Gabriel Petek, CFA, San Francisco (1) 415-371-5042;
Steven J Murphy, New York (1) 212-438-2066;
firstname.lastname@example.org Secondary Contacts: Robin Prunty, New York (1) 212-438-2081;
John Sugden-Castillo, New York (1) 212-438-1678;
email@example.com Media Contact: Olayinka Fadahunsi, New York (1) 212-438-5095;
firstname.lastname@example.org (New York Ratings team) (email: Harold.Barnett@thomsonreuters.com; Reuters messaging: harold.barnett.thomsonreuters.net; Tel: +1-646-223-4186))
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