Moody's Investors Service said yesterday that the trend of more downgrades than upgrades for municipal credits reversed itself in the first half of 1993, as the agency raised $7 billion in ratings and lowered $2.2 billion.

The 136 issues upgraded and 88 downgraded between January and June compares with the first half of 1992, when there were a total of 102 upgrades affecting $6.2 billion of debt and 109 downgrades affecting $35.3 billion of debt.

Much of the dollar volume of downgrades in the first half of last year was attributable to the rating demotions of several major issuers, including New York State, California, and Rhode Island.

In this year's second quarter, there were 83 upgrades affecting $5.4 billion of debt, and 50 downgrades affecting $1.1 billion of debt, Moody's said.

By category, the agency said every sector had a favorable rating distribution in the second quarter except health care, which experienced eight downgrades and six upgrades. (See article, page 4.)

Revenue bond issuers as a whole experienced 49 upgrades and 16 downgrades in the second quarter. General obligation issuers had an even split, with 34 issues upgraded and 34 others downgraded. But dollar volume was tilted in favor of upgrades, as $1.9 billion in outstanding bonds were raised and $627 million lowered.

Among the more noteworthy revisions during the period were upgrades for Philadelphia and Cleveland.

Moody's said its change to Ba from B for Philadelphia, which affected $1.1 billion in debt, was the result of "significant demonstrated progress toward restoring financial stability."

Cleveland's shift to A from Baal was "due to the city's careful fiscal management and the importance of the city in the regional economy," Moody's said.

By region, the Northeast and Central states experienced more downgrades than upgrades, but every other region had a favorable mix.

Standard & Poor's Corp. last month released a rating breakdown for the second quarter that did not offer the same good news for issuers. The total of 69 downgrades the agency handed out on $1.3 billion in debt outpaced the 40 second-quarter upgrades affecting $1.4 billion in debt, Standard & Poor's said.

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