Moody's Investors Service yesterday sharply lowered its rating on bonds issued by the city of Melrose, Mass., to Ba from A.

The rating agency attributed the steep downgrading of the city's $3.4 million in general obligation bonds to "weak liquidity, unreasonable budget assumption," and an accumulated deficit of $3.1 million, nearly 10% of the city's $32 million budget for the fiscal year ending June 30.

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