Moody's downgrades Sacramento, Calif. lease revenue bonds to A2

SAN FRANCISCO Thu Jan 31, 2013 12:25pm EST

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SAN FRANCISCO Jan 31 (Reuters) - Moody's Investors Service downgraded Sacramento, California's master and non-master lease revenue bonds on Thursday while maintaining its Aa2 issuer rating on the city, leaving a three-notch distinction between the issuer rating and the bonds.

Moody's downgraded Sacramento's master lease revenue bonds to A2 from Aa3 and downgraded the city's non-master lease revenue bonds to A2 from A1, while affirming the city's Aa2 issuer rating with a stable outlook.

"We believe the lease pledge is relatively less secure than our prior estimates, both in terms of probability of default and likely losses in the event of default," Moody's said in a statement.

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