Opinion: CalPERS bonds with Lockyer

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The governing board of CalPERS, the huge state employee retirement system, backed Treasurer Bill Lockyer’s plan to get the three big bond-rating agencies to reform the way they rank municipal bonds. That’s a big deal; CalPERS’s investment portfolio has a value of $244.7 billion.

The Times editorialized last week that Lockyer was on the right track in demanding that the agencies hold municipal bonds to the same standard as corporate bonds. As it stands, municipal bonds generally are rated lower even when they are subject to less risk of default.

At a hearing of the House Financial Services Committee last week, one of the agencies -- Moody’s Investors Service -- said it would begin rating municipal bonds on the same scale as corporate bonds if the issuer requests it.