Though the past few weeks in the markets have been rather slow, due to the shortened trading weeks, there was some good news for the major indexes as 2013 came to a close. The S&P 500 and DJIA Index both managed to finish the year on high notes, before coming down slightly on the first day of trading for 2014. Though indexes were down on January 2, the day saw some positive economic news, as the Initial Jobless Claims report was released and showed that claims fell to 339,000 for the week ending December 28, 2013 from 341,000 reported the week prior. Analysts were expecting the number to be 344,000. On December 31, December's consumer confidence index was also announced, coming in at 78.1 versus the expected 76. The 10-year Treasury yields also ended the year on a high note, closing at 3.04 on December 31, before falling down to 3.0 on the first day of trading in 2014. As the last few weeks have seen holidays and fewer trading days, we have combined Moody's upgrades and downgrades from December 23rd to January 4th into one newsletter. Below are Moody's municipal bonds rating changes from the past two weeks.

Upgrades

• Greenville Utilities Commission, NC: Moody's upgraded this commission to Aa3 from A1. The upgrade factors in the diverse combined utility revenue stream of the system, which is pledged to bondholders, and in particular the strength of the electric revenues. The rating further reflects continued stability in the commission's financial operations, growth in the stable service area anchored by institutional presence, and a manageable debt burden with rapid retirement.
• Delray Beach, FL: Moody's upgraded this city's utility tax bonds to Aa3 from A1. The upgrade of the utilities tax bonds incorporates consistently strong debt service coverage ratios, satisfactory legal provisions, and the relatively affluent, residential and stable nature of the taxable base.

Downgrades

• San Miguel Fire District, CA: Moody's downgraded this fire district from A1 to A2. The downgrade primarily reflects the district's historically narrow reserves and liquidity that have been outpaced by similarly rated districts in recent year. The district's fiscal position is now significantly weaker than most fire districts in the state. The A2 rating continues to reflect the district's stable financial management, large tax base and above average wealth indices.
• El Rancho Unified School District, CA: Moody's downgraded this school district to A2 from A1. The downgrade to A2 reflects the district's extremely limited and downward trending General Fund balance, brought on by four consecutive operational deficits. The A2 rating also incorporates the district's narrow liquidity, average socioeconomic profile, growing taxbase and manageable debt burden.
• Mid Valley School District, PA: Moody's downgraded this school district to A3 from A2. The downgrade to A3 and negative outlook reflects the trend of narrowing reserves to very low levels. Moody's believes that the district's financial position will continue to be challenged given its limited revenue raising ability and trend of increasing fixed costs. The A3 rating also incorporates the district's modest tax base, and above average debt burden.
• Cochise County Unified School District 9 (Benson), AZ: Moody's downgraded this school district to A3 from A1. The downgrade to A3 reflects the district's weakened financial position driven by multiple years of structural imbalance caused by fluctuating major revenues and limited expenditure reduction measures. The rating also incorporates the district's moderately-sized tax base and above average debt burden.
• City of Dubuque, IA: Moody's downgraded this city's Water Enterprise senior lien revenue bonds to A1 from Aa3. The rating downgrade reflects the enterprise's pressured financial operations that have resulted in narrow liquidity leading to senior lien debt service coverage falling below the rate covenant outlined by the 2008 and 2010 bond ordinances and sum sufficiency.
• Walled Lake Consolidated School District, MI: Moody's downgraded this school district's general obligation bonds to Aa3 from Aa2. The downgrade to Aa3 rating reflects significant declines in the district's reserves in fiscal 2013 and anticipated in fiscal 2014 as well as a material increase in its debt burden as a result of the current issuance. While reserves remain adequate, they are unlikely to be restored to healthier levels in the near term.