Moody's Investors Service has downgraded Hennepin County, Minn.'s first-lien sales tax revenue bonds to Aa1 from Aaa in connection with the agency's new rating methodology for debt backed by special tax revenues.

The downgrade affects $148 million of bonds sold in 2007. Moody's affirmed the Aa2 assigned to $107 million of second-lien bonds from 2008 and the Aa3 on $53 million of third-lien debt from 2008. All the liens carry a stable outlook.

The Aa1 rating "reflects the large economic base that generates the pledged revenues, strong nature of special tax pledge that encompasses tangible personal property and services to final users, strong debt service coverage, and a minimally funded debt service reserve fund," Moody's wrote.

Hennepin's general obligation debt is rated Aaa by Moody's.

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