Victor Quiroga of Southwest Securities in San Antonio said he read an article in the Wall Street Journal Wednesday, along with probably millions of other people, which reported that the credit rating firms of Standard & Poor’s, Moody’s Investors Service and Fitch Ratings were refusing to allow their bond ratings to be used for new bond sales.
He immediately inquired to see if the development would have an impact on the upcoming sale and was told that it would not affect municipal bond ratings.
“It’s business as usual,” Quiroga said.
The WSJ article said the new law will make ratings firms liable for the quality of their ratings decisions, effective immediately. That part of the law has made the ratings firms cautious about allowing their ratings to be used in many types of commercial loans.
According to the article, sales in the $1.4 trillion bond market for mortgages, car and truck loans, student loans and credit cards could end until the ratings companies better understand their legal risks.
Several companies have stopped bond offerings indefinitely, the article said.
Quiroga reported early Wednesday that he and Southwest Securities staff members had met with officials of the Texas Commission of Environmental Quality in Austin Wednesday and the state officials “did not have too many questions.”
The TCEQ must approve the bond sale before Southwest Securities can proceed.
The BWSD board had approved the sale of $1.6 million of the $3 million the district is allowed to sell to finance improvements to Beeville’s surface water system.
Most of the money will be spent on updates and improvements to the George P. Morrill Water Treatment Plant at Swinney Switch.
Quiroga expects the sale of the bonds to be scheduled for late September.
Gary Kent is a reporter at the Bee-Picayune and can be reached at 358-2550, ext. 120, or at reporter@mySouTex.com.