Michael Johnston resigned his position last week as manager of Northeast regional ratings at Moody's Investors Service to join Kidder, Peabody & Co. as manager of municipal research.

Johnston, who begins his new post on Aug. 8, said Friday that at Kidder he will focus on general municipal market research.

Johnston has been at Moody's since 1986. He began as a junior analyst in the rating agency's Great Lakes group and moved to the Northeast region in 1989. He became supervisor of the group that year and has held the post ever since.

Before joining Moody's, Johnston was an economic analyst with New York City's planning department.

Kidder's government bond operations have taken several major hits recently after a scandal involving "phantom trades" surfaced. But Johnston said he does not believe the firm's municipal business has been affected by the negative attention.

"Obviously, there's been a lot of press and that's something people are focused on," he said. "But fundamentally it's a very strong firm. Their municipal business has been growing and I don't think it's been affected" by the government bond scandal.

Marvin Markus, managing director of the municipal department at Kidder, called Johnston "a worldclass analyst" who will help the firm expand its municipal operations.

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