Moody’s Investors Service has downgraded the Los Angeles County Metropolitan Transportation Authority’s $1.2 billion of Proposition C sales tax revenue bonds one notch to Aa3 because of weaker coverage.
The rating agency also downgraded the authority’s $166 million of general revenue bonds to A1 from Aa3.
Moody’s said the downgrade of the LACMTA debt reflects weaker leverage compared to other bonds and other highly rated mass-transit sales tax bonds.
It also said a cumulative 18% decline in pledged revenue between fiscal 2008 and fiscal 2010 contributed to the downgrade.
Analysts said the stable outlook reflects expectations that retail sales within Los Angeles County will continue to recover.
Moody’s also affirmed its Aa2 rating on the transportation authority’s Proposition A and Measure R bonds because of stronger coverage.