Wall Street: Assessing Gilt

AAA may mean the American Automobile Association to millions of Americans, but to cities, states and corporations in search of money it is a supreme symbol of solvency, the highest accolade Wall Street can bestow. Armed with that much-sought but carefully dispensed rating, a borrower can attract more investors, get by with paying lower interest rates on loans, and generally profit by the blue-chip aura that prime rating bestows in the business world.

As more and more local and state governments look to bond offerings for financing — a new record of $10.3 billion in bonds will be offered this...

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