March 29 (Reuters) - Moody's Investors Service on Friday said it cut California's Sacramento County pension obligation bonds (POBs) to Baa1 from A3.
The rating agency also affirmed the county's long-term ratings which include its A2 issuer and Baa1 certificates of participation ratings.
The rating actions affect about $1.2 billion of debt.
"The downgrade of the POBs incorporates our changed view of the pledge supporting POBs versus general obligation bonds. We believe this pledge is relatively less secure than our prior estimates, both in terms of probability of default and likely losses in the event of default," the rating agency said in a statement.
Moody's said the outlook is stable, reflecting "as predicated on our expectation that the economy will continue to slowly improve while management controls costs to maintain general fund cash and reserve levels no worse than current amounts."