Sept. 9 (Bloomberg) -- Sacramento County, home to California’s capital, had its credit rating lowered one level to A2 by Moody’s Investors Service because of its “precarious” finances.
Moody’s also downgraded by one step the ratings on Sacramento County’s pension-obligation bonds to A3, and on its lease obligations to Baa1. The outlook is stable. The county is scheduled to offer $238.3 million in taxable pension-obligation bonds on Sept. 21, Moody’s said in a report today.
“The downgrade reflects the county’s weakened financial position which remains precarious despite important steps taken by the county to restore its financial health,” the report said. “The pace of projected improvement has slowed substantially, a factor also incorporated into the downgrade.”
Sacramento County, with 1.4 million residents, had a 12.6 percent unemployment rate in June, above the state level of 12.1 percent and the national rate of 9.3 percent, according to the Moody’s report.
Moody’s said that even with the county’s economic challenges, including a depressed housing market, it assigned a stable outlook because managers are working to simplify its debt structure and improve its finances.
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