NEW YORK - Moody's Investors Service said it has downgraded to A2 from A1 the city of Inglewood, Calif., issuer (implied general obligation) long term rating, and to A3 from A2 the rating on the city's 2005 pension obligation bonds.

The rating action primarily incorporates the consistent weakening of the city's financial position and declining tax base. In addition, the rating reflects the fact that the moderately sized $6.6 billion tax base located in Los Angeles County (Aa2/stable), 13 miles southwest of the city of Los Angeles (Aa3/stable), remains challenged. The rating also factors in the city's moderate but manageable debt burden of 1.2%, which is expected to decline given the absence of future debt plans, and an amortization of principal (35.8% within 10 years) that is slow relative to the payout of a comparable California city. All of the city's debt is fixed rate and the city is not party to any derivative agreements.

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