Fitch Ratings Monday downgraded Philadelphia to BBB from BBB-plus and removed the credit from negative watch, affecting $1.1 billion of general obligation debt. The outlook is stable.

The rating change is due to weaker year-end results for fiscal 2009, which ended June 30, and also for the first quarter of fiscal 2010, even after officials implemented “significant and proactive” spending cuts, according to Fitch.

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