The amount of debt upgraded in the second quarter of 2014 was greater than the amount of downgraded debt due to upgrades for the states of California and New York, Moody's Investors Service said.
This marks the first time in six years upgrades have outpaced downgrades and shows a continuing stabilization across the different sectors.
The vast majority of ratings remained unchanged in Q2, with movement among only 2% of all ratings despite a change in the local government general obligation debt methodology.
Despite the stabilization, Moody's expects downgrades to continue to exceed upgrades for the remainder of the year but with the possibility of further improvement over the next several quarters. In all there were 282 total rating changes in Q2, with 91 upgrades for $158 billion and 191 downgrades for $84 billion. Downgrades for the State of New Jersey and the Puerto Rico Electric Power Authority accounted for almost half of the amount downgraded.
