FujiBank Ltd., the largest provider of municipal letters of credit, was stung by a downgrade yesterday when Moody's Investors Service lowered its long-term ratings to Aa3 from Aa1.

Fuji's short-term rating will remain at the highest level, Prime-1, according to Moody's. The short-term rating is considered paramount in most letter-of-credit backed deals because enhanced issues are almost exclusively variable-rate issues with effective short-term maturities.

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