Moody’s Investors Service downgraded to A1 from Aa3 Stockton, Calif.’s issuer rating.
It also downgraded the city’s 2007 Series A and B taxable pension obligation bonds to A2 from A1, and its 2006 Series A lease revenue refunding bonds to A3 from A2. The outlook on the city’s ratings is negative.
Stockton has a large tax base and management is working to address structural budget issues, but Moody’s cites challenges that include the weak economy, the city’s below-average income indexes, narrow financial position, and variable-rate debt.
Stockton is the seat of San Joaquin County in California’s Central Valley. It has a population of 290,400 and is the county’s largest city.
Its major taxpayers include food processors, which reflect the large agricultural component of its economy.
It is 78 miles east of San Francisco and 45 miles south of Sacramento. Many residents commute to jobs in Sacramento and the easternmost portion of the San Francisco Bay Area.
