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UPDATE 1-Moody's cut Calpers, Calstrs muni programs

(Adds Moody’s comment)

SAN FRANCISCO, Dec 10 (Reuters) - Citing declines in the value of investments by Calpers and Calstrs, Moody’s Investors Service downgraded on Thursday its long-term ratings on the municipal enhancement programs of the California pension funds for public employees and teachers to Aa3 from Aaa.

“Today’s rating action reflects our expectation that the cumulative back-to-back market value declines in the investment portfolios of both Calpers and Calstrs for the fiscal years ended June 2008 and 2009 will exacerbate long-term projected actuarial funding shortfalls, recent market gains notwithstanding,” Martin Duffy, a Moody’s senior credit officer said in a statement.