Moody

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New York-based Moody’s in a releas Monday said it lowered its ratingof $6.8 billionn in general obligation bonds to Aa2 from Aa1. That’as a step down to the third-highest ratinv from the second. The rating, Moody’s also applies to $40 million in coal development generalk obligation bonds set to sellnext week. Moody’e wrote that the downgrade followed “a long period of pronounced economidcunderperformance caused, in by the overweighting of manufacturing in the state’s industry employment Fitch last week lowered its rating on the Ohio bonds, despite holding to a “stable” outlook, for similar reasons.
Moody’s analysts Edward Hampton and Maria Coritsidis also maintained a stable outlook on the state bond s on expectations that the stat e will be able to handlse itsfiscal challenges. But the analystss also pointed to a number ofpotential snags, including the use of “non-recurring” revenue – specifically the state’s rainy day fund and federal stimuluas dollars – to shore up existing and projected future budget holes. “While Ohio has a historgy of timely spending reductions to addressarevenue shortfalls, it increasingly is usinh non-recurring measures, such as restructuring debt to defer principal repayment,” the analysts wrote.