In Nigel's defense; I am sure he just repeating the half-truths told to him by the City of Portland.

I don't know anything about "bond credit ratings", but I do know this, Mr. Jaquiss is a very studious reporter (better than most), and his error was most likely a result of him being misled by the liars down at City Hall.

Hi Jack—

I'm a little confused when you write "Portland's credit rating is not AAA or Aaa. Repeat -- not."

Because you then write "Only the city's general obligation bonds have an Aaa rating."

I would contend that in common parlance, the meaning of the term "credit rating" as it refers to issuers of government debt is the issuer's general obligation rating.

I agree that the city's non-general obligation debt (such as urban renewal bonds) is rated less than AAA. I realize you know the following, but at the risk of telling your readers something many may already know, the reason that non-general obligation debt is rated lower than general obligation debt is because the cash flows dedicated to pay off such bonds do not come from the general fund. In most cases, non-general obligation funds are therefore inherently more risky.

You have noted in the past that the city buys often buys insurance to enhance the rating of the debt non-general obligation debt. As a taxpayer, I would say that is a prudent decision because it protects the general fund and lowers the interest rate the city pays.

So, to return to your original point: the city does in fact have a AAA credit rating.

http://www.portlandonline.com/omf/index.cfm?c=26617

That AAA grade is a rating agency's assessment of all that it knows about the city's financial health. Since the city's various other debts (including the pension obligation and urban renewal bonds) are a public record, you'd have to presume the ratings agencies factor all other potential liabilities into their assessment. (Although I would obviously acknowledge the agencies have made a lot of mistakes about everything from Enron to exotic mortgage securities).

I agree with you that if the city issues bonds for a convention center hotel, they are unlikely to be general obligation bonds. But a big part of the reason that Metro came to the city in the first place is because credit ratings agencies and investors see the city as a bigger and better credit risk than Metro (because the city has a larger tax base).

And as the city explores issuing bonds for a hotel, one of the key considerations will be the credit rating (i.e the general obligation credit rating) of the issuer. That's why the city's AAA rating for general obligation bonds rating is germane, even though the bonds, if issued probably will not be general obligation.

So I would argue that if the city issues hotel bonds, part of what determines (and lowers) the cost of such debt will be the city's underlying AAA rating.

Certainly, the story I posted about Metro's delaying the decision could have been clearer.

But in summary, I think my reference to the city's having a AAA rating is both accurate and common shorthand for agencies' assessment of general creditworthiness.

Nigel

"... many times I have to write about this before the mainstream media people "get" it ..."

Jack, at some 'enlightenment moment' it dawns on us that the errors and false (mis)representations are intentional, deliberate deception. As in LIARS for Iraq Invasion -- was it 'bad intelligence' or 'incompetence in office'? And while we argue that foisted false dichotomy, they go on purposefully LYING more.

Iraqi official: $9 billion in Iraq reconstruction funds "lost." [ http://www.washingtonpost.com/wp-dyn/content/article/2008/09/22/AR2008092202053.html?hpid=topnews ] WMR -- In another example of how the U.S. is behind the fake "false flag" organization called "Al Qaeda," Iraqi chief investigator said some money diverted to "Al Qaeda in Iraq" accounts in Jordan and elsewhere. ( Al Qaeda -- the Database, by Pierre-Henri Bunel, Global Research, November 20, 2005 -- "In the mid-1980s, Al Qaida [abbrev. for Arabic 'Q eidat ilmu'ti'aat' ] was a database [of bank customers' names and addresses] located in [a] computer and dedicated to the communications of the Islamic Conference's secretariat.")

---
Ben Franklin (and then later, H.L. Mencken or someone): "It is impossible to get a man to understand an idea that his job depends on him not understanding."

That's why the city's AAA rating for general obligation bonds rating is germane, even though the bonds, if issued probably will not be general obligation.

So I would argue that if the city issues hotel bonds, part of what determines (and lowers) the cost of such debt will be the city's underlying AAA rating.

That's convoluted in the extreme.

Ah come on Jack, Nigel(Pulitzer)Jaquiss is just trying to find a way to say "well I REALLY was't truly wrong wrong."

Nigel is one of the best, and I admire him. People get the wrong idea about the city's overall credit situation, though. It is not excellent -- far from it.