The authors use the Moody's and Standard & Poor's bond market prices, transaction volumes from the Municipal Securities Rulemaking Board, and Ipreo issue/issuer characteristics. Moody's reported in 2008 its intention to change the municipal bond rating assessment, and recalibration took place on four dates in the spring of 2010. First, the authors analyze the effect of the recalibration and show that some bonds were upgraded while others were not. They then show that the recalibration had a permanent effect and that most upgrades remained valid in the subsequent year. They also show that the new calibration approach is applicable for new issues. Next, they use secondary market information to focus on retail investors, filtering by trade size. They also gather after-tax yield data of US Treasuries because municipal bonds are usually tax exempt. The authors then assess the impact of the change in methodology on cumulative abnormal returns, which turns out to be positive for upgraded bonds.