Moody's Investors Service said this week that rating changes in the third quarter were positive overall, with 77 ratings and $4.6 billion of debt upgraded.

The agency said it downgraded 27 ratings and $2.9 billion of debt during the period.

Combined results for the first three quarters were also positive, with 213 upgrades and 115 downgrades. About $11.6 billion was upgraded and $5.1 billion downgraded from January through September.

One of the biggest rating changes came in July, when Moody's downgraded the general obligation rating of Los Angeles to Aa1 from Aaa. The agency cited the effects of a severe recession and restructuring of the area's economy as primary factors. The move affected $1.23 billion of outstanding debt.

On the upgrade side during the third quarter, Moody's raised its rating on $365 million of Austin, Tex., bonds to Aa from A1, reflecting an improved economy and more disciplined fiscal management.

In revenue bonds, Moody's raised 40 issues totaling $3.4 billion and lowered seven totaling $551 million during the third quarter.

Fifteen housing bond issues were upgraded and one was downgraded. Moody's said most of the adjustments came as a result of a comprehensive review of all locally issued single-family mortgage revenue bond programs.

Wide, favorable spreads between mortgage rates and bond rates, and rapid pay-down of debt in recent years because of prepayments contributed to the trend, Moody's said.

Thirteen water and sewer bonds were upgraded and two downgraded. In the health-care sector, the agency said four ratings rose and one fell.

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