NEW YORK - Moody's Investors Service has downgraded to Baa1 from A3 the ratings on Elk Grove Unified School District's Community Facilities District No. 1, Calif., special tax bonds. The rating applies to approximately $125 million of outstanding debt.

The rating downgrade primarily reflects the significantly narrower debt service coverage levels provided by decreased tax revenues. Between 2008 and 2011 debt service coverage decreased from 1.25x to 1.05x, largely as a result of the severe decline of the area housing market.

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