DALLAS — Moody’s Investors Service yesterday downgraded Arizona’s issuer credit rating to Aa3 from Aa2 as the state faces continuing financial stress and diminished borrowing capacity.

In addition to the issuer downgrade, Moody’s lowered the rating on appropriation debt to A1 from Aa3. The A1 rating also applies to about $62 million of refunding certificates of participation expected to be priced next week for the Arizona School Facilities Board.

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