Moody’s Investors Service completed its assessments of the outlooks of five Aaa-rated states and 161 Aaa-rated local governments previously identified as indirectly linked to the U.S. government, affecting a combined $69 billion of debt.

As a result of these assessments, Moody’s has revised the outlook to stable from negative for two states and 119 local governments, while leaving the outlook negative for three states and 36 local governments.

In addition, six local governments continue to carry negative outlooks for reasons unrelated to the U.S. government. While Moody’s does not view these issuers as indirectly linked to the U.S. government, their ratings are under review based on other credit factors.

Also, one of the local governments placed on negative outlook in August was previously downgraded to Aa1 for reasons unrelated to the U.S. government.

Moody’s gave negative outlooks to the issuers on Aug. 4, following the Aug. 2 confirmation of the U.S. government’s Aaa sovereign rating and assignment of a negative outlook. That rating action concluded a review for possible downgrade that Moody’s initiated on July 13.

“Today’s actions are based on an expanded evaluation of the exposure each municipality has to the U.S. government, including economic sensitivity to federal spending reductions, dependence on federal transfers, and exposure to capital markets disruptions,” said managing director Naomi Richman.

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