Moody's Investors Service said it has assigned an A1 rating to Santa Clara County's refunding lease revenue bonds (capital projects) 2012 Series A, issued by Santa Clara County Financing Authority, and downgraded to Aa2 from Aa1 the county's general obligation bond rating; downgraded to Aa3 from Aa2 the rating on the county's pension obligation bonds; and downgraded to A1 from Aa2 the ratings on the county's outstanding lease backed obligations. The outlook on these ratings is stable.

The downgrades reflect the county's significantly weakened financial position, following three consecutive years of general fund deficits (2009-2011), and the limited prospects for rebuilding the county's balance sheet in the current economic environment.

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