Public finance downgrades continued to outnumber upgrades for the 10th consecutive quarter, according to the latest study from Moody's Investors Service.

The rating agency downgraded 127 credits in the April to June period, versus 43 upgrades. That makes for a ratio of 3 to 1, an historically high level but an improvement from the 3.9-to-1 ratio in the first quarter.

The ratio peaked at 4.6 to 1 in the fourth quarter of 2010.

The par-dollar value basis figures paint a more depressing picture: rating changes amounted to $71.6 billion in downgrades compared to only $4.2 billion in upgrades.

"All major municipal sectors will continue to face pressure over the near to medium term as the economy continues its slow recovery," said Naomi Richman, a managing director quoted in the report.

The figures were presented as a preview of an in-depth analysis to be published later this month.

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