5 States May Lose Moody’s Top Debt Rating on U.S. Reliance

Five of the 15 states with top bond ratings from Moody’s Investors Service may be downgraded because their dependence on federal revenue makes them vulnerable to a U.S. credit cut should talks to raise the debt limit fail.

Maryland, South Carolina, New Mexico, Tennessee and Virginia are under review, Moody’s said today. The action affects $24 billion of general-obligation and related debt, it said. The states are rated Aaa, Moody’s top municipal grade.