Connecticut Monday was downgraded to A1 from Aa3 by Moody's Investors Service.

The Moody's downgrade follows a similar action Friday by Fitch Ratings, which lowered Connecticut to A-plus.

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"The downgrades reflect continuing erosion of Connecticut's finances, evidenced by the pending elimination of its rainy day fund, growing budget gaps and rising debt levels," Moody's said. "The pressures created by growing fixed costs, coupled with weak economic performance, are unlikely to relent and will raise the risk of credit-negative actions such as deficit borrowing or backloaded financings."

The outlook on Connecticut was revised to stable from negative at the new, lower rating.

Along with Connecticut general obligation bonds, Moody's also downgraded to A1 from Aa3 outstanding ratings on special tax obligation senior and subordinate lien bonds.

Bonds secured by state agreements to pay debt service with funds that are deemed appropriated, through a special capital reserve fund, the UCONN 2000 program or other state guarantee mechanisms, were also downgraded to A1 from Aa3.

State-supported child care revenue bonds requiring appropriation for debt service payments were downgraded to A2 from A1.

Moody's has affirmed the A1 rating on economic development bonds issued by the Connecticut Development Authority and the VMIG 1 on the state's General Obligation Bonds, 2016 Series C bonds.

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