The two leading rating agencies have released their results for the third quarter of this year.
Standard & Poor's Corp. reported that it downgraded more municipal debt than it upgraded in the third quarter. Preliminary data show that $23 billion of debt was downgraded and $13.1 billion was upgraded.
The disparity is mainly attributable to the downgrade of $13 billion of California general obligation bonds from AA to A. Also, $4.1 billion of Illinois Gos was lowered from AA to Aa-minus.
Leading the list of upgrades in the quarter were $6.1 billion of Massachusetts GO bonds and $2 billion of various guaranteed agency debt, both of which were ralsed from BBB to A.
The agency said the utility and housing sectors had a number of upgrades in the third quarter, while education, special tax, and transportation issues saw more downgrades.
In the second quarter, upgrades overtook downgrades for the first time since 1989, according to the rating agency.
For its part, Moody's Investors Service reported raising 57 municipal ratings and lowering 40, affecting $45 billion in debt.
However, the rating agency said that a larger total of municipal debt - $28 billion - was downgraded than upgraded - $17 billion. The downgrades of California, New Jersey, and Illinois general obligation debt were credited for a large portion of the total of demotions. Massachusetts GOs were upgraded during the quarter.
The agency said revenue-supported issues continue positive for the quarter with 19 upgrades and 5 downgrades.
Regionally, the agency said five of the eight regions of the country had favorable quarters, two regions had an equal number of downgrades and upgrades, and only New England had a negative quarter, with downgrades outpacing upgrades, four-to-three.
