Report Explains Evaluation In U.S. Public Finance Of Credit Impact Of Extreme Weather Events
On Nov. 2, 2020, S&P Global Ratings released a report titled "Extreme Weather Events: How We Evaluate The Credit Impacts In U.S. Public Finance." The report outlines S&P's methodology for assessing credit ratings in the context of extreme weather events like hurricanes and wildfires. It emphasizes that credit quality before a disaster significantly influences post-event credit stability. The report aims to inform market participants about potential credit impacts, although it clarifies that it does not involve any rating actions.
- S&P Global Ratings provides important insights into credit evaluations impacted by extreme weather events.
- The report aims to enhance market understanding of potential credit effects, which may stabilize investor confidence.
- The report overview suggests reliance on pre-disaster credit quality, potentially leading to misjudgment in cases of sudden credit deterioration.
CHARLOTTESVILLE, Va., Nov. 2, 2020 /PRNewswire/ -- (S&P Global Ratings) Across U.S. public finance, extreme weather events can have greatly varied credit impacts. When events such as hurricanes, wildfires, and tornadoes occur, market participants want to understand the potential short- and long-term impacts on credit. S&P Global Ratings strives to relay any such impact in our ratings.
In a report published today, "Extreme Weather Events: How We Evaluate The Credit Impacts In U.S. Public Finance," S&P Global Ratings summarizes our process and considerations for analyzing and updating the market about our ratings across U.S. public finance sectors during and after an extreme weather event. We also highlight sector-specific issues that we view as key credit considerations during these events.
"We assess ratings impacts on a credit-by-credit basis. All else being equal, the better the credit quality at the time of the disaster the more likely a credit is to avoid major deterioration thereafter," said S&P Global Ratings credit analyst Lisa Schroeer.
This report does not constitute a rating action.
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SOURCE S&P Global Ratings
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