Moody’s Investors Service will recalibrate long-term state and local municipal bond ratings to enhance the ability of investors to compare quality across a spectrum of bond investment alternatives. Previously, Moody’s published separate ratings scales for state and local municipal bonds and a global rating scale for sovereign, sub-sovereign, financial institution, project finance, structured finance and corporate obligations. The reasoning for the change is that municipal credits have a historically low default rate, and the dual system resulted in a perceived penalty for issuers in the form of higher borrowing costs or interest rates paid by the issuers. Moody’s employed the old scale for rating municipal credits since 1918. According to Moody’s, there are approximately 18,000 state and local government entity bond issuers, with security combinations covering nearly 70,000 ratings.