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Home / CT: Dem AG Sues 3 Credit Rating AgenciesCT: Dem AG Sues 3 Credit Rating Agencies
Last Updated on Thursday, 31 July 2008 11:17 Written by rslcpol Thursday, 31 July 2008 10:00
From TMC.net:
Blumenthal’s suit takes aim at what he calls a dual rating system for corporate and municipal debt, under which, he claims, corporations systematically receive higher ratings than municipalities with lower risk for default.
Municipalities are then charged higher interest rates for their bonds, or pay bond insurance to secure a better rating.
Municipalities nationwide pay $2.3 billion each year in bond insurance premiums, while default rates for those bonds are below 1 percent, according to the claim.
“We are holding the credit rating agencies accountable for a secret Wall Street tax on Main Street — millions of dollars illegally exacted from Connecticut taxpayers,” Blumenthal said.