Moody’s Investors Service downgraded Glendale, Calif., to Aa2 from Aa1 as part of the rating agency’s adjustments of California bonds. The Los Angeles-area city’s outlook is stable.
The rating agency announced plans in October 2012 to draw a greater distinction between general obligation and lease revenue bonds in California cities.
Moody’s analysts warned at the time that the reviews of city bonds it rates could result in multi-notch downgrades for some.
Glendale also had the ratings on the its variable-rate demand certificates of participation, Series 2000C, downgraded two notches to A1 from Aa2.
Approximately $50.7 million of debt was affected by the Jan. 10 rating action.
The one-notch issuer rating downgrade reflects some of the city’s inherent economic weaknesses and the city’s potential financial challenges going forward, according to the report.
Analysts said the weaknesses are balanced somewhat by the city’s economic expansion in some areas, relatively strong operating performance and management throughout the recent economic downturn.