SAN FRANCISCO — Moody's Investors Service downgraded $3.2 billion of Los Angeles bonds yesterday, as elected officials in the nation's second-biggest city battled over a plan to raise electricity rates.

The agency downgraded the city's general obligation bonds to Aa3 from Aa2 and reduced the ratings on other general fund debt by one notch. The non-GO debt carries ratings from A1 to A3, depending on the exact security structure. Moody's maintained a negative outlook on the debt.

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