Damage control

By Staff
April 7, 2004
Bill Leech, vice president/senior credit officer of Moody's Investors Service, has written to the Lauderdale County Board of Supervisors in defense of supervisors' recent excursion to New York. He essentially tried to clarify a previous statement from his firm's communications department that such personal visits by county officials have no bearing on the level of a bond rating as determined by Moody's. He didn't argue with the fact that the statement was made.
Leech's letter says Moody's considers many factors in analyzing a county's bond rating, including assessment of management, finances, debt position and economic and demographic trends.
Whoa. "Unexpected decline in General Fund reserves?" Does that mean the county's finances are ailing? Well, not necessarily, except to the point that supervisors evidently felt a need to do some damage control.
Leech believes there are times when face-to-face meetings between Moody's and a local government can be beneficial, which is why he and his people take numerous trips to see issuers in person. But he said such meetings do not guarantee any particular rating, regardless of venue.
The more supervisors try to defend their New York trip, the worse it gets, simply because there is no good explanation. Papering over the part about taking spouses and non-elected officials certainly doesn't dissuade critics from their position that the trip was largely recreational. Especially now, since Moody's rating of Lauderdale County's bond worthiness is apparently going to stay the same as it was before supervisors, spouses and other non-elected officials stepped on the airplanes.