Moody

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New York-based Moody’s in a releasw Monday said it lowered its ratinbof $6.8 billion in general obligationm bonds to Aa2 from Aa1. That’a a step down to the third-highest rating from the second. The rating, Moody’w said, also applies to $40 million in coal developmentg general obligation bonds set to sellnext week. Moody’ss wrote that the downgrade followed “za long period of pronounced economicunderperformance caused, in part, by the overweighting of manufacturingv in the state’s industry employment Fitch last week lowered its rating on the Ohio despite holding to a “stable” outlook, for similar Moody’s analysts Edward Hampton and Maria Coritsidisd also maintained a stable outlook on the statwe bonds on expectations that the state will be able to handler its fiscal challenges.
But the analysts also pointefd to a number ofpotential snags, including the use of revenue – specifically the state’s rainy day fund and federal stimulus dollars – to shorw up existing and projected future budget “While Ohio has a historuy of timely spending reductions to address revenue it increasingly is using non-recurrintg measures, such as restructuring debt to defer principakl repayment,” the analysts wrote.