Los Angeles and Pasadena financial officials filed disclosure notices about the potential impact that Moody’s Investors Service’s downgrade of Bank of America could have on bonds issued by their cities.
The bonds listed by Los Angeles included nearly $1 billion of variable-rate wastewater system subordinate revenue bonds. Pasadena officials reported that $134 million of variable-rate demand refunding certificates could be affected.
Moody’s downgraded Bank of America’s holding company on Wednesday to Baa1 from A2 for long-term senior debt and to Prime-2 from Prime-1 for short-term debt. The long-term deposit ratings of Bank of America NA were downgraded to A2 from Aa3, while its short-term rating was affirmed at Prime-1.
The actions conclude a review for downgrade announced on June 2. The outlook on the long-term senior ratings remains negative, the agency said.