Glossary of Municipal Securities Terms

PROVISIONAL RATING

An indication of what the credit quality of an issue is expected to be after a construction or interim period is concluded. The provisional rating does not, however, represent a judgment of what might happen if problems are experienced during the construction or interim period, or of the likelihood of such problems occurring. Provisional ratings are typically assigned when the debt service on an issue is secured solely by revenues to be derived from a project whose construction is financed by the issue; the rating remains provisional until the construction is completed and the project has begun to generate the revenues. These types of ratings are sometimes referred to as “conditional ratings.” See: RATINGS; UNDERLYING RATING.

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