The Influence of Accounting Information Disclosed Under GASB Statement No. 34 on Municipal Bond Insurance Premiums and Credit Ratings

21 Pages Posted: 5 Jun 2014

See all articles by Earl D. Benson

Earl D. Benson

Western Washington University - Finance and Marketing Department

Barry R. Marks

University of Houston, Clear Lake - School of Business and Public Administration

Date Written: Summer 2014

Abstract

This paper examines the impact of accounting information on first the cost of municipal bond insurance and secondly on the credit rating awarded on municipal debt, using data disclosed under Statement No. 34 of the Governmental Accounting Standards Board (GASB 34) for insured general obligation debt issued by Texas cities. It finds that both governmental fund and government‐wide financial information is related to the cost of municipal bond insurance and the credit rating on municipal debt. The paper also shows that the utilization of accounting information by bond insurers is not identical to its use by a bond rating agency.

Suggested Citation

Benson, Earl D. and Marks, Barry R., The Influence of Accounting Information Disclosed Under GASB Statement No. 34 on Municipal Bond Insurance Premiums and Credit Ratings (Summer 2014). Public Budgeting & Finance, Vol. 34, Issue 2, pp. 63-83, 2014. Available at SSRN: https://ssrn.com/abstract=2446304 or http://dx.doi.org/10.1111/pbaf.12035

Earl D. Benson

Western Washington University - Finance and Marketing Department ( email )

FMDS Department MS 9077
Bellingham, WA 98225-9077
United States
360-650-3375 (Phone)
360-650-4844 (Fax)

Barry R. Marks

University of Houston, Clear Lake - School of Business and Public Administration ( email )

Houston, TX 77058
United States

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