Moody’s Investors Service has downgraded Allentown’s underlying general obligation rating to A2 from A1, affecting $100 million of parity-related debt. The outlook remains negative.

The agency also assigned an A2 underlying rating to $13.65 million of Series 2011A GO bonds. Moody’s cited three straight operating deficits, largely driven by aggressive budgeting of city revenues and reserve appropriations to balance the budget in 2008 and 2009.

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