Stoever Glass & Co., Inc.
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Bond ratings begin with a request from the issuer. The issuer must pay a fee to obtain a rating. That is why ratings are not automatic. In addition, if an issuer sells more bonds without a rating, the rating will generally be withdrawn.
The rating process is strong, but not perfect. When I was Chief Municipal Rating Officer at S&P, rating teams had two people assigned, with one senior person assigned to the rating. Only senior analysts with experience can vote; the junior analyst may make recommendations, but their vote doesn’t count.
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