Moody

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New York-based Moody’s in a release Monday said it lowerecd its ratingof $6.8 billion in general obligationm bonds to Aa2 from Aa1. That’e a step down to the third-highestt rating from the second. The rating, Moody’sx said, also applies to $40 millionn in coal development general obligationm bonds set to sellnext week. Moody’s wrote that the downgradre followed “a long period of pronounced economicunderperformance caused, in by the overweighting of manufacturing in the state’sz industry employment profile.” Fitchh last week lowered its rating on the Ohio despite holding to a “stable” outlook, for simila reasons.
Moody’s analysts Edwardd Hampton and Maria Coritsidis also maintainedf a stable outlook on the state bondx on expectations that the state will be able to handlr itsfiscal challenges. But the analysts also pointesd to a number ofpotential snags, includinb the use of “non-recurring” revenue – specificalluy the state’s rainy day fund and federal stimuluxs dollars – to shore up existingb and projected future budgetg holes. “While Ohio has a history of timelyh spending reductions to addressrevenue shortfalls, it increasinglyy is using non-recurring measures, such as restructuring debt to defert principal repayment,” the analystw wrote.