We get electronic alerts from our clients’ security custodians (Schwab and Fidelity) whenever something happens that they judge warrants our attention. Last night, we received 233 separate alerts — each of which delivered the news that Moody’s had upgraded its credit ratings on a particular municipal bond. The ratings involved school district voter-approved general obligation (GO) bonds, and the ratings went from the existing Baa1 up to A3.

As we have written ad nauseam, we consider school district GO bonds to be about the most secure bonds an investor can own. There are technical and legal reasons this is true..all of which reasons are lost on Moody’s and S&P. We’ve never considered these to be Baa1 credits to begin with…most are equivalent to AA or AAA, in our opinion. The bonds are payable from a revenue stream that is completely insulated from competing creditors, such as retiree costs.

At least it’s nice of Moody’s to provide this minor upgrade. It still does not reflect the true quality of the bonds. We will continue our practice of making our own credit judgments and not relying on analysts in New York to do our work for us.