(In 2nd paragraph, Moody’s corrects proportion of downgrades to 83 percent from 87 percent)
WASHINGTON, April 29 (Reuters) - 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 Monday.
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 statement.
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, Moody’s said.
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 Kenneth Barry)