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<br />480 MOODY'S aOND RECORD March 1996
<br /> Moody'. Bond Ha!!n;~ I
<br />Purpon: ine ourpose at Moocv's RatIngs IS to provlae tne lnveSlors with a ..tallstlcal lactors 810ne. Ofnce they are sppralSal 01 tonl;Hsrm n&KS. induding the
<br />Simple. ~vstem 01 graoatlon oy wnlCh the relative mV8Slmenl aualltles of Donas ....~"ognnlun ot many r.on-Slahs.tle8! lac'lors..
<br /> ;';oooy', R.Un~s '.u,...nl Ih. oo;",on 01 Moodv', InveslolS SeMC9 as 4Jt
<br />may De nOlec. relative Investment CtassillC8110n 01 banas. AI;. such. they snoula De us8CI In I
<br />Cilllro;lts in Raling:: The Quality of most bonOS is nol fIxed and steaety over 8 junctIon with the Ce&erIDllOn ana' Slali6tics acpeann In Moody's: Mun"
<br />Denoo at lime. out tenas to unOerpo cnanpe. ~or tnis reason enangas In ratmgs Government Manuai and MuniclDal Credit ReDOru, RaY.rence l1IOuid be ml08 0
<br />occur so as 10 rellect lnese venallOns In tne mtnnSlC position oj InQIVlOual bOnas. tnese lor sntonnatlOn reQarOlno tn6 ISSuer.
<br />A cnange In rallng may thus occur at any lImB In Ihe case 01 an mOMoual ISSue. An unciertylng rating reoresents Mooay"S evaluation 01 the debt lervice r&P8y.
<br />Sucn rallno cnanoe snould serve nobce lnal MoodVs observes some alteration In mem C8Daetty of an ISSuer witnoul glVlt1g etlec: to the credil ennancamenl on
<br />lne Inves1mem niKs of 1ne bond or thai Ine previous ra6ng did not lully reflect tnat IS&U8r& datIL I
<br />the Qualify oj me DOna as now seen. Whae cecause 01 Ultur very nature, cnanges (Dutch Auction): This design8tion denotes that tne securities to which II is
<br />are to De exoected more 1reQuenlly among bonQs of lower ratIngs tnan emong
<br />Oon05 01 htgner ratmgs: nevennetess. me usar at bond rtltlfl'iJS snOUld lI;eeo Close 8SSIQfl8O are sUOJBCI to penodlC reotter and resal. In the S8C0naary market II'l 8
<br /> "duten auctJon". (wnic:h mav be publIC or pnvate). and hI IS a conseQuence.
<br />and constanl e:necx on ell ratln95.00fh high and low ratm1;Js.tnereby to be aele Ie the ability of holders ot such securitIeS, to sell suc:n securities at suCh penocic
<br />note cromclty any sIgns of Cfl8ng8 In Investmenl status WTIlcn may OCC':Jr. auctIons and the onces. if ~' at Which sUCh securmes may De so IOkI will I
<br />Umltltlon. to Use. of Ratinaa: Banas C8n'Vlng lhe ;ame nning are nol clauned aeDel'ld solely on conditions 0 suppty and demana Drevaiting in the sec:ondary
<br />10 De ot at)SOjutely eaual lJuallty. In a broad' sense tney are 8lu<e rn ~Illon. but mal'K81 at the time at sUCl'l 8Uc:lIOns. The credit_ rating aSSll;lnetl by Moody's 10
<br />SInai 1here are only nine ranng classes used _ in Ql'3Olng tnousanas 01 Donos. the seamt)8S beaMg the ctes~9"Bll0" (Dutch AucUon) ez:0resse5 a Judgment .by
<br />symOOIS cannot reflect the hne snaoln9S 01 nslcs wtllCfl actually exlSl. Therefore, Mooay's soiery as to me abUny ana wdltngn8S$ 01 the ISSuer oj such HCU~ to
<br />II snould De evident to tne user 01 ratings tnat rwo bonOS t08nbCally rated are make repulany s.:neauaec caymenrs of pnnctD8I, cremlum, tr any, and lr11ereSI
<br />unlikely to be crease)y Ine same 10 tnVBSlmenl auality. under tne Inoenlure or otner eonstilUUVe InslrumentS pUf'luant to whicn SUCh I
<br />As raMps are 08s1gned exciusIWliy jor tne purpose 01 gradIng bonos according S8O.lmies were ISSued and In no way az:Dresses any jucgment Whatsoever as 10
<br />10 their InV6${menl O\J8lilies. Ihey snoulO no! be usea alOne as a DaSlS lor mV861- me ability 01 any halOS! of sucn seculibes to sell any of suc:n securities in Ule
<br />menl Opetabons. For eX8me>>e, tney have no value In lorecasllng me dlreetlon 01 seconaary mal'k9t at sUCh penOQlC au:tlans Of tne pnces, If any, at 'Nhict1 any of
<br />ILrtUre lrenos of markel Dnce. Markel once movementS In DOnos are Inliuenced sucn &8CUritles may De soll1.
<br />nol only by lne Quality at IndtviauaJ ISSUes CUI alSO Dy cnBnges In money rates AbaenC8 at Rating: Where no tattng ilas been assi;neCl or where a rating has I
<br />ana general econonuc lrenos. as well as Dy tne Iengtn oj matunty. etC. Dunng its been suspenQQd -or W1tnorawn, 11 may De tor reasons unral&l8d 10 the C1u&my of
<br />lite even Ine DeS1 auahTy DOna may nave WIOe once movements, whiie ItS nigh tne ISSue.
<br />InY8Stmenl Slatu& remaIns unc:nan98t1. Should no ratmg be assiQT1ed. the reason may be one 01 tne fOllowing:
<br />The maner of rn&rxel cnce nas no ounng WMtB08Y8r on tne Oelennmabon of , . An IQOhCIlIon jor rating wu. not I'808MKi or aa::801ed.
<br />.raunQS wnich Ire no! to be canstWIKI 8fi t:BCOrItm8noatJons wittl l'88oeet 10 2. The I5SU8 or lS&U8r Delongs 10 a group 01 HCUrtUes ht I'" not rated as a
<br />~aDract1Y8nMS. ft The attractiveness of 8 QlY8n oond may GeDeno on its ytBlO.. its matter of polICy. I
<br />malumy aate or other laclOf8 lor whlen tne nvestor may aearcn, lIS weu as on its 3. There 1& I laCK 01 88&8n1ial I18ta oertaining to the i:IIue or issuer.
<br />Investment ouality, t08 onlY cnaraaensuc 10 wnlCh the rallng rulers. ". The iaaUlil WB.& Onvat8iy plac:8C. If1 wtD:rl cue the raDno IS not pubJil;Md in
<br />Since rallnQS inVOlVe luogmBnt& aDDut tne luture, on me one nand, and Since Moody's cuohcattol'l6..
<br />they ere used Oy InvestOrs as a means 01 DroteettOn. on tne otner. me effort: 1& SusDeMlOn or wttnorawal may oc:cur If new anc::l material c1n:umstano81 an.. the
<br />meae wnen ISSlgnmg rallngs 10 lOOK al '"worst" potentl8libe& In me "vr&Jble" effeas of wnia'l Dreouoe Mtislaaory a~; If there is no lOnger In&aDle I
<br />luwr6. ratner OlIn SOlely al 1ne past recotCl and the &tatU& at the present. The.... rauonaDIe UP-ID-Oa18 oats to permit a luagmenl to be tormea: If a bond is call8Cl
<br />lore. tnV8Slors using tns fBtlng &lJoUK:I noL exP8d 10 hnd Ifl tnem a relleCtlOn 01 tor reoemOllon: or lor omer fB8SOns.
<br /> Key to Moody's Municipal Ratlnga
<br /> - B I
<br />Bonds whicrl are IlIteel Au are iuoQ8el to be of the best Quality. They carry the Bonds WhICh Ire raled B ,",neraliv lack Ch8taCIItnItICI ,at the deIUaI:He .
<br />smal1861 r:l8Ql'ge 01 Investmenl ",I( Ina are generally I8tet1'8Cl 10 as "gilt eQ98." menL Assurance 01 IMll8f8liit ana o'nnaoal OIIvmentB or 01 maintenance oe
<br />Im81"881 payments are Drot80ecI oy a large or Dy an 8XC8D00n81lY ItaDI8 mal'Oln tBrms allhe c:ontract over any lOng penoci or ume may be IImail
<br />and DMClDBI l& NCUre, wt'llle 1M venous protectNe 8lemems are IiKBly 10 Coo
<br />CMfl(2e. wen cnan9ls as can De >nSU8l&zsd are mOlt unl~ to Imcalr tne lunaa. Bonds Which are rated Caa a1'9 01 poor standmC;. Such Iasues may be In oe&aull or I
<br />rnenwly S{tong position 01 1iUel'1 I8&UBS.
<br /> .. the,e may 08 pt888nt ...menu 01 oanger wlth t8I08Clto pril"lClPlll or II1tBtKl
<br />Bonds wnicn are rBled .... are Juogea to be 01 nigh austily Dy aU Nnoaros. Co
<br />T 098tner wtlh 1ne A.aa proup lMe,!, comcnsa wnat are penerahy known as nIgh Bonas which are ra1ed Ca I'8DI'8H"I OOI198tlOO& which are aoecutabve In a hipn
<br />graoe DOnas, Tney are rated lOwer lnBn the best DOnos 08C8u&8 mstQln& 01 oe;ree. Suen I$SU86 are onen to O8laUQ or nave Otn8r I'nIlIUd JIlOttcornrngL I
<br />Crol.ClIon may no! De as large as. In Au secuntlBS or lIuauauon 01 protectrve C
<br />elements. may De of gl'88.ter amDlltuoe or 1nere may De Otner elements prasent Bonos wtUcn are nlled C are 1ne IOW8SI ral8cJ CIU8 of bonOI. and IaU88 10 rated
<br />wnicn make tne tono-term naG apcear aomewnal larger men In Aaa aecuntl8S. c:en De ~toeCI U navmg uuemery poor p"*** of ewr aaatI'IIng any INl
<br /> A irWwtmenl It8l'lomg. .
<br />Bonos wnil;'! are rated A ooaeI$ many faYOrab18 inveItment attrtbUles and arB Con. (_)
<br />10 be conat08f8d as upQer milOlum praoe oDI1g8t1Ons. Factors pMng MelJnfy to I
<br />onnacal and interest 11'8 consJ08r&a aoeaual8. oUl -.mems may De pruant 80nas tDr wt\id'i tne MCUriry aeoenos uoon Ih8 compietjon of IOfM 8Cl or the
<br />Which augQ8Sl a 1IJICI~lify to ~nt aomeume Il'1 tne IUlura. tuIfIUment 01 some conciIbon Ire I'8tea c:onditIonaily. n... .,. bonCI MCUrIld by
<br /> Boa ,a) """"01 of DI'OI8CI8 unaer constnJCbOn. (b) ..~ 01 PrqIC!I un.aaoned
<br />30nds whictt are mea Baa are oonsiOer8d as mecIium grade abilQltions. i.e.. tney 10 ClP8Rl1lOn 8XD8nenoe. (C) rentat& wnic:h beQln WIlen racIIibeI are ~. or
<br /> ld) 'Drfm8nt& to wrncn IOm8 other Imitmg condition etlaaMrs. P....lIt\.~ rat.
<br />are nettner hlgnty pml8CI:eCl. nor ooony HCUnK1. tmel'88t payments ana cnnaDIJ I'1g cenot_ OItlClb48 Cr8GIl. aaDIj1l UQOI'1 c:ornD'IbOn 01 c:one:trucaan or Mmina. I
<br />security IDD88r 808Cuate tor the Of...nt but certam DrcteCt1Y8 el8m8mS mav De tJon of DUIS 01 conOitJon.
<br />I8dting or 1TUI'!' be ChBnlIctensbcatly unreiiaDle over any great IengIn Of time. Such (PJ~
<br />oonas 18ck. DUtSl8nCtIng Investmenl CNltaCUI",bca anc:l In lee: new aoecula1Ml
<br />cnar&ClenstJCS as weU. When _teet to torwan:l delivery bonOS:. indic:It8S that the I'8tir1g 11 pnMIiOnIl
<br /> Sa pending oeIrvery ot tn8 bonOS. "The ratr1g may be nMIed pnor to MMtry If I
<br />BondS which arB rated B.a alB iU098d to nave &D8CUIahYe ei8ments: tnelr tulure eNln985 oa::ur III tne Ieg&t oocumentli Of.the unoenymg CNdII q~ 01 tnI
<br />cannot be cansiaer&Q as well assureo. Otten the Dtotecbon of intet8sI ana Dnnci- bonos.
<br />OBi payments may Of very mooerste and tnel'8DY not well l8Ieguaraea ourmg Nolo: Tnooo oonas on tno Aa, A. Baa. Sa and B _ ....... llooOy'. _
<br />oaIh IJOOCl and Old tunes over U'I8 futwI. Unc:enaimy ot poMIon ~ QC:aI8eS tn& Slronpest ~I! anriDuIe8 are ~ l7f the aymDc* A.al.
<br />0CIn0I In 1tUI dUL A1.aU1.Bal, and B1.
<br /> MOODrs MUNICIPAl. BOND YIElll AVERAGEs I
<br /> -_. -~byAdngl- -- --""-- -_. -1lUIiIDII.,., ......-
<br /> Munic. - .. A ... Munle. - .. A ... - - .. A ...
<br />,.... 1111 ,... I
<br />.-. .-.. ,.3, 5.14. 5.11 5.315 5.150 ..... .... 15.57 15.'" 11."3 .... e." ..... ..&- .... ~... u. .... ....
<br />"""- .-.. 5.211 5.015 S.'6 5.27 ..5. .... n.. 6.25 a.05 e..OI 6.2'" e..IS' """- .... 5." .... 5."2 .... ....
<br />..... ..u 5.52 5.29 S.., 5.56 5.7. Ma,. .... 6.12 5.i' 5." 6.15 a.50 ..... .... - - - - -
<br />"Dr. ...- 5.86 S..... 5.80 5.71 5.87 ..,. .... S,aE1 5." 5.BO. 5.98 1I.0t ..,. .... - - - - -
<br />- .-.- 5.83 5.82 5.71 5.110 6.02 ...,. .... 5.13 5.eS 5.1> 5.81 S.ia .... .... - - - - -
<br />-. ...- 5.118 S.76 5.86 6.07 6.tS ..... __a. 5.Dill 5.152 5.81 5.73 5.U ..... .... - - - - .
<br />...... uu 6.10 5.88 11.10 8.17 B.2e Jul. .-.. 5.75 5.88 5.8. 5.76 $.l;It .Jul. .... - - - - I
<br />_. ...- 6.07 5.88 e..OlS 6.1:3 S.%3 - .... 5.18 5.83 5.81 5.16 5.95 _. .... - - - -
<br />..., .--. 8.08 5.87 5.0Q &..15 S.22 -. .... 5.18 5,71 S.7S 5.711 5.110 -. .~.. - - - -
<br />"'"' .... B.26 8.05 8.~0 8.33 6.:17 Ca- .... 5.13 5.7. $.7" 5.84 $.115 Ca- .... - - - -
<br />-, .... s.n 6,57 B.n 6.8i1 8.88 _. .... 5.83 5.58 .5.S! S.1!I3 5.76 _. .... - - - - -
<br />""'- .... 6.73 6,82 I.n 6.73 7.17 ""'- -... 0.50 5..40 5.43 5.5' 5.56 ""'- .... - - - - -
<br />Tbc avc:r.,a tMIve iDcca COOIUIICUll:I.bom .. amaIl ~, of pDllftI....... ..-. lJDOer 'the ~vdy Ital:Mc matht CCIIlCbUOlllIhal..yaem DCriOlmllO --'-il)'. Iiowewt. IHIlim' ~ I
<br />marulCDllll1lUcmL.&a a--.,c.-red ~1DeCifN:~qwcklytlecllmal ~ ~r..I1lUJOlGmc:Du:tll bonO&.~y.tot IOIM-Moodr".~""_m.........,.-...c." watrill
<br />... 00erI f'YCn NIl only 10 maitty" IIIlO I!WIIl1IYtlutataoco tllClanoi preniimr...... fUel (OCI!MI'IftIIIC wtIlIl IN IJI-.aI yaddI wautd ..jfboftdl of UlC ........,._IIIftWlCIIIIIDDGL (" _Iy.
<br />II _~ CIBp'IIla UIlIlMoocly't.PCftJCS nawcOCCCllDe~ b'yUIIII_1ftMW. n.a.Macm:-,'.SIIWIICnMI baBd..~~~ hum ..bram.......,... s--t....____
<br />In Ll'Iie _1UUe matxCL. MOOCIY'11lei1eWl& tnaI; nUS I' lfte DrlI" KQIft1~1'M&nI ol aamciln, ana rcDOI'UllI m.ama. tn=IIQl.
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