TEXT-Fitch to revise otlks on certain Municipal rtgs directly linked to U.S. sovereign
Nov 29- Following Fitch's revision yesterday of its 'AAA' United States Sovereign Rating Outlook to Negative, Fitch expects to revise the Outlooks to Negative for certain categories of ratings that are directly tied to the creditworthiness of the United States or its related entities.
Specific rating actions will be announced over the next several days as programs and securities are reviewed for the degree to which obligations of the United States or its agencies are the determinant of their ratings and Outlooks. The overwhelming majority of Fitch-rated U.S. municipal securities are not directly linked to the U.S. sovereign rating.
Categories of debt whose ratings are expected to be affected include:
--Debt obligations whose repayments are guaranteed by the United States or by financial institutions directly linked to the United States, such as Fannie Mae, Freddie Mac, or the Federal Home Loan Banks ;
--Obligations that are enhanced through letters-of-credit issued by financial institutions directly linked to the United States;
--Pre-refunded bonds whose repayments are wholly dependent on 'AAA' rated United States government and agency obligations held in escrow;
--Municipal bonds that are wholly secured by 'AAA' rated United States government and agency obligations held in escrow;
--Municipal housing bonds that are primarily secured by mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and/or Freddie Mac;
--United States government-sponsored entities' obligations whose ratings, in Fitch's estimation, reflect a very high likelihood and degree of government support.
For more information about ratings tied to the United States sovereign rating, please see 'Rating Linkages to the U.S. Sovereign Rating', dated July 18, 2011.
For more information on yesterday's U.S. sovereign rating actions, please see 'Fitch Affirms United States at 'AAA'; Outlook Revised to Negative', 'Fitch Revises Fannie Mae and Freddie Mac Outlook to Negative; Affirms Ratings at 'AAA'', 'Fitch Revises the Rating Outlook on the Federal Home Loan Banks to Negative', and 'Fitch Revises Rating Outlook on the Farm Credit System to Negative', all dated Nov. 28, 2011, and available on Fitch's website at 'www.fitchratings.com'.
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