Moody's raises Alameda County, Calif. one notch to Aa1

SAN FRANCISCO, March 19 Tue Mar 19, 2013 12:34pm EDT

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SAN FRANCISCO, March 19 (Reuters) - Moody's Investors Service upgraded Alameda County, California's issuer rating on Tuesday by one notch to Aa1 from Aa2, citing the county's strong finances, reserves and its economic rebound.

"The upgrade reflects the county's exceptionally strong financial position as it emerges from the recent severe economic downturn," Moody's said in a statement, noting the county east of San Francisco "now boasts the strongest reserve position among the largest and most highly-rated counties in the state."

"Also key to the upgrade is the steady recovery of the county's economy, as reflected in recent growth trends in jobs and property tax base, both of which have nearly recovered to pre-recession levels," Moody's said.

The ratings agency expects the local economy's growth will outpace the country as a whole so that Alameda County "is likely to continue to enjoy strong financial operations for the foreseeable future."

At the same time, Moody's upgraded the county's lease-supported obligations to Aa3 from A1 and confirmed Alameda's outstanding pension obligation bonds at Aa3.

The outlook for the ratings is stable, Moody's said, citing the county's "overall economic stability and its demonstrated ability to maintain budgetary balance and comfortable operating reserves even during a period of economic and financial downturn."

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