Before issuing a bond, municipalities typically must have a bond rating from Standard and Poor’s (S&P), Moody’s, or Fitch. They evaluate local, state and federal governments on the economic well-being of the area and your government’s ability to pay back debt issued on a bond. In assigning a rating for general obligation bonds the rating agencies assess the following factors:
- Economy
- Debt structure
- Financial condition
- Demographic factors
- Management practices of the governing body and administration