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Wealth management team gains efficiencies using tool to manage U.S. municipal exposures


This Financial Institution (FI) needed to streamline its credit risk surveillance process. By working with S&P Global Market Intelligence, the firm was able to increase its efficiency when evaluating the creditworthiness of municipal entities.

This financial institution (FI) manages a portfolio of thousands of Public Finance issuers for its wealth management clients. The FI’s credit risk team conducts an in-depth credit analysis at origination and annual review on every issuer as part of the bank’s credit risk surveillance process. Additionally, the credit risk team shares these credit analyses with the FI’s traders, fund managers, and brokers. Given the importance of these analyses to several banking departments, the team was interested in upgrading and streamlining its processes. By working with S&P Global Market Intelligence (Market Intelligence), the team achieved these goals, increasing their efficiency when evaluating the creditworthiness of municipal entities.

Pain Points

The credit risk team had been struggling with their existing solution from a different provider, which was not adequate for the institution’s needs.

  • Data coverage: the FI was spending more hours trying to obtain the necessary data than it was conducting the analysis.
  • Credit scoring tool: the analysts often had to override the results, adding even more time to the credit assessment process.
  • Client support: the credit risk team reported longer than preferable wait times to access support.
  • Overall time commitment: the overall process was cumbersome; the bank was looking for a faster solution.

The client’s public finance risk management team looked to S&P Global Market Intelligence for a solution that would address its needs.

The Solution

Market Intelligence recommended PFAST, an Excel-based suite of Market Intelligence Credit Assessment Scorecards that is both an automated credit scoring and data solution enabling users to:

Assign credit scores to the vast majority of the company’s municipal customers

PFAST offers broad Public Finance sector coverage, including:

  • General Obligation issuers or states, cities, counties, and school districts
  • Water and Sewer utilities
  • Not-for Profit Health Care including health care systems and hospitals
  • Not-for-Profit Higher Education including private and public/state institutions
  • Transportation including airports, mass transit, toll roads, bridges, and tunnels
  • Housing including single- and multi-family agencies

Score a municipal portfolio in minutes
By simply inputting a CUSIP or S&P Capital IQ ID, a user can generate overall risk scores for each issuer and sub-scores such economic fundamentals, budgetary flexibility and liquidity scores.

Automate the spreading for all S&P rated General Obligation, Water & Sewer, Healthcare, Higher Education and Airport Obligors
Market Intelligence has collected more than three years of financial and economic data for all rated general obligation issuers, water & sewer, healthcare, higher education, and airports. The data and credit scoring are fully automated by simply using an identifier (CUSIP or S&P Capital IQ ID).

Conduct scenario analysis
Additional functionality for conducting “what-if” scenario analysis for your municipal portfolio.

Key Benefits

The PFAST solution provides an automated credit scoring tool for all U.S. cities, counties, and school districts and water and sewer utilities. A similar approach is also available for the major rated revenue bond segments. Key benefits include:

  • Broad scope of application with sector-specific credit scorecards and data for General Obligation and Revenue Bonds including Water and Sewer, Not-For-Profit Healthcare, Not-For-Profit Higher Education, Transportation and Housing.
  • Productivity gains with the automated data collection and credit scoring of nearly all cities, counties, school districts, special purpose districts, water & sewer utilities including unrated entities.
  • Methodology transparency of the Scorecard including all risk factors, weights, benchmarks, and scoring algorithms.
  • Training and ongoing analytical assistance to help groups understand the range of available capabilities and continue to get the most out of the solutions.
  • Quickly get up to speed in public finance credit analysis with our easy-to-use Scorecard User Guides and 24/7/365 support from our global customer support team.
  • Validation support through annual technical documentation that explains Scorecard methodology and testing.
  • Extensive coverage and continually growing database of municipal entities financials and economic data.

Click here to learn more about the Public Finance Automated Scoring Tool (PFAST), mentioned in this case study.

Learn more about Public Finance Automated Scoring Tool (PFAST)

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