The ratio of upgrades to downgrades among municipal credits remained positive for the first quarter of this year, though it declined from previous quarters because of increased costs on auction-rate securities and softening credit conditions for specific issuers, according to Moody's Investors Service.

In the first quarter of 2008, Moody's made 208 rating changes, according to its first quarter trend report. Of these, 157 changes were upgrades compared to 51 downgrades, resulting in an upgrade-to-downgrade ratio of 3.1-to-1 for all sectors. This compares to an overall ratio of 6.0-to-1 for the third quarter of 2007, and 4.5-to-1 for the fourth quarter.

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