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Priority Reports
Time-sensitive quantitative analysis of key indicators of financial management and economics.
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Priority Reports

Priority DUE DILIGENCE REPORT

The Priority Due Diligence Report is known as our “Pre-purchase” report, as it is the most frequently requested credit risk assessment report used prior to the purchase of a municipal bond. The report evaluates an array of key financial indicators and includes a table analyzing S&B’s most important municipal financial ratios and assigns an overall bond rating. This process was designed to meet the time-sensitive needs of clients purchasing bonds on the secondary market. As a result, Due Diligence Reports can be turned around in a timely manner. The metrics provided in this report can also be integrated into your investment policy for the purchase of new securities.

Additionally, the report includes a relative analysis and designation of county demographic and economic factors. The report also includes a market valuation of pricing and yield for the bonds based on information provided by the client at the time of the purchase. The reports are also useful in receiving a general evaluation of credit risk in a portfolio.

PRICE: $200 PER BOND

For more information contact info@sbmuni.com or 844.834.6795

 

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INVESTMENT GRADE REPORT

The Investment Grade Report is a simplified Priority Report that designates the credit rating using loan loss classification language. Rather than a numeric credit score, a rating designation of “Pass,” ”Watch,” ”Substandard,” “Doubtful,” or “Loss” is assigned with summary reporting on financial and economic performance. “Pass” and “Watch” designations are both classified as Investment Grade, while “Substandard,” “Doubtful,” and “Loss” are all Non-investment Grade designations. “Substandard” is an indication of poor financial management, according to S&B. “Doubtful” follows an indication of distress or significant technical default or covenant violation. “Loss” indicates that the municipality has defaulted on debt service payments. This report can be used to quickly determine the level of credit risk in each bond and whether additional reporting is required. S&B recommends additional, expanded analysis for any rating designation that is not a classified as a “Pass” credit.

Please contact us for pricing.

For more information contact info@sbmuni.com or 844.834.6795

 

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PRIORITY RATING REPORT METHODOLOGY

S&B provides two types of rating reports, Priority Reports and Standard Reports. S&B’s Priority Rating Reports are designed for an expedited turnaround, whereas Standard Reports involve a manual spread of data and provide expanded reporting. Therefore, the Priority Reports are most often used for pre-purchase analysis.

The model weighs a wide selection of financial indicators that S&B has determined to be critical for an issuer’s long-term solvency. These indicators are scored according to thresholds and are weighted together to generate the financial management score for the municipality. S&B believes that financial management, the capacity of the municipality to generate revenues and moderate expenses in response to changes in revenues and other resources, is the best indication of whether there is an increased risk it will default, or fail to make its payments of principal and interest on the bonds each year. Additionally, these Priority Ratings are used to evaluate credit risk in an entire portfolio more quickly than the Standard Rating process. Further expanded, or Standard analysis is recommended to understand the risk in higher risk bonds.

The Due Diligence model utilizes a threshold scoring system. Some financial ratios include year-over-year rate of change, average rate of change, and net change. S&B includes a variety of other financial and debt ratios to analyze various aspects of financial management. The Due Diligence mode score is the primary determinant for each rating reviewed by each analyst. The Priority Rating scale includes S&B 1, S&B 2, S&B 3, or S&B 4, with a rating of S&B 1 demonstrating the least risk of default and S&B 4 indicating a high risk of default or impaired credit.

In the Priority Reports, S&B includes a visual indication of financial strength by providing a “Performance” label for the most importance financial indicators. These indicators are color-coded and labeled “Strong,” ”Moderate,” ”Weak,” and ”Very Weak.” These labels provide an easy-to-identify overall financial performance as well as areas of weakness on which to focus further research. Additionally, S&B provides the essential socioeconomic data for the county and state relevant to each municipality. S&B designates a relative economic score and color codes each component of the economic performance table as well with a similar ranking of “Strong,” ”Above Average,” ”Average,” ”Below Average,” or ”Poor.”

 

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