Business Services Industry
S&P Assesses Public Sector Innovative Transactions
Business Wire, Sept 23, 2002
Business Editors
LONDON--(BUSINESS WIRE)--Standard & Poor's
Sept. 23, 2002-- Standard & Poor's Ratings Services said today it has published a report on the analytical and accounting implications of innovative financial operations in the public sector.
The report discusses transactions such as securitizations of future public sector receipts; complex derivative operations; private financing initiatives, through which public investment and operating expenditures are contracted out; and the creation of public nonconsolidated borrowing institutions.
"Our role is to determine the credit risk implications of transactions," said Standard & Poor's credit analyst Moritz Kraemer. "As such, certain public sector obligations or transactions may be retained in part or in whole on the balance sheet within the debt obligations of the public authority, regardless of how the transactions are officially recorded, if all or part of the risk or repayment obligation is retained with the government."
"Where the innovative operations impact future fiscal flexibility in a more substantial way than seen so far, changes in credit ratings will follow," Mr. Kraemer added. "So far, however, most of these transactions have not been of a sufficient scale to trigger rating changes on their own."
The report, entitled "Accounting for Innovation: Treatment of Off-Balance-Sheet Public Sector Financing Operations" is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. It is also available on Standard & Poor's public Web site at www.standardandpoors.com; select Resource Center and, under Ratings Criteria choose Sovereigns. Alternatively, call the Standard & Poor's Ratings Desk in London at (44) 20-7847-7400.
ANALYTICAL E-MAIL ADDRESSES
moritz_kraemer@standardandpoors.com
marie_cavanaugh@standardandpoors.com
alexandra_dimitrijevic@standardandpoors.com
beatriz_merino@standardandpoors.com
sovereignlondon@standardandpoors.com
PublicFinanceEurope@standardandpoors.com
Copyright 2002, Standard & Poor's Ratings Services
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