Moody's Investors Service said it has downgraded to A1 from Aa2 Contra Costa Fire Protection District, Calif.'s series 2005 pension obligation bond rating.

The pension obligation bonds are an absolute and unconditional obligation of the district, secured by its pledge to make debt service payments from any legally available revenues.

The downgrade reflects Moody's changed opinion that pension obligation bonds are less secure than prior estimates, both in terms of probability of default and likely losses in the event of default.

The POBs are an unsecured, absolute and unconditional obligation of the district payable from any legally available funds.

The decision to move the rating two notches opposed to one primarily reflects the district's above average general fund debt burden and recent trend of unbalanced financial operations.

The A1 rating continues to reflect the district's sound, though recently declining, reserves, large tax base and unique property tax intercept that ensures a set-aside for debt service prior to the property tax apportionment is released by the county treasurer to the district.

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