(In 2nd paragraph, Moody's corrects proportion of downgrades to
83 percent from 87 percent)
WASHINGTON, April 29 Moody's Investors Service
continued to downgrade more public finance ratings than it
upgraded in the first quarter of 2013, primarily because of cuts
to California local governments, the rating agency said on
Altogether, downgrades made up 83 percent of the credit
rater's actions, although the amount of debt downgraded dropped
to $27 billion - the lowest amount since the last quarter of
2011 - from $95 billion in the fourth quarter of 2012.
On the other hand, the amount of upgraded debt rose to $10
billion from $4.2 billion the previous quarter, which was the
highest quarterly total since the fourth quarter of 2010.
"We expect rating activity to continue to be skewed toward
downgrades over 2013 as local governments continue to struggle
with increasing pension and healthcare costs and constraints on
key property tax and state aid revenue sources," Moody's
Assistant Vice President and Analyst Eileen Hawes said in a
California's cities and counties "dictated much of the
rating activity during the first quarter," with about $19
billion of their debt downgraded, compared to a little more than
$7 billion bonds upgraded.
More than half of the upgrades affected debt issued by the
City of Los Angeles and by the City and County of San Francisco,
two California governments, as well.
The largest downgrade during the quarter was on revenue
bonds for Dallas Fort Worth International Airport in Texas,
Last week, Fitch Ratings said it had downgraded more public
finance debt than it upgraded in the first quarter, but charter
schools were at the root of most of the rating decisions.
(Reporting By Lisa Lambert; Editing by Chizu Nomiyama and