The market had a number of down sessions this week due to the escalating violence, and possible intervention, in Syria, and the ongoing fear of the Federal Reserve tapering its bond-buying program. A revision in GDP up to 2.5% brought some good news for the economy, but personal spending and personal income growth slowed from months prior. Into the end of the week, yields fell while 7-year, 10-year and 30-year bond prices rose amid the uncertainty in the Middle East. This week also brought a number of upgrades and downgrades from Moody s, which are highlighted below:

Upgrades

• Successor Agency to the Huntington Beach Redevelopment Agency, CA: Moody s upgraded this successor agency to Baa2 from Ba1. The upgrade reflects the strong coverage, high incremental AV to total AV and high wealth levels of residents. These strengths offset the slight weaknesses of its geographically small project area, and its somewhat concentrated taxpayers.

• Successor Agency to the Buena Park Community Redevelopment Agency, CA: Moody's upgraded this successor agency to Baa3 from Ba1. The upgrade to Baa3 reflects the relative strengths of the project area compared to other Moody's-rated Tax Allocation Bonds with a few notable weaknesses.
• Successor Agency to the Claremont Redevelopment Agency, CA: Moody's upgraded this successor agency to Baa3 from Ba1. The reflects the project area's relative strengths compared to other Moody's-rated Tax Allocation Bonds (TABs), though there are weaknesses in a few areas outlined in our February special comment. The project area's coverage for the first payment period in calendar year 2013 is a strong 6.9 times, while coverage for the second period in calendar year 2013 falls below 2 times, though remains relatively strong at 1.6 times.
• Successor Agency to the Bakersfield Redevelopment Agency, CA: Moody's upgraded this successor agency to Baa3 from Ba1. The upgrade reflects the healthy coverage and sizeable acreage of both project areas. These strengths outweigh and somewhat mitigate the risks of the low incremental AV to total AV level and taxpayer concentration.
• City of New York, NY: Moody's upgraded this city from Aa2 to Aa1. Since a loss to investors would occur only if both the Bank of Montreal providing the letter of credit and the City of New York default in payment, Moody's has assigned ratings based upon the joint probability of default by both parties. In determining the joint probability of default, Moody's considers the level of default dependence between the Bank and the City. In these cases, Moody's has determined that there is a low level of default dependence and, as a result, the joint probability of default results in credit risk consistent with JDA ratings of Aa1.
• Southwest Local School District (Hamilton County), OH: Moody's upgraded this school district from A2 to A1. The upgrade is supported by the district's materially improved operating performance, underpinned by strengthened financial and budget management practices. The A1 rating reflects the district's recent financial improvement, highlighted by multiple years of operating surpluses and increased fund balance, its moderately-sized tax base located outside Cincinnati (Aa2/negative outlook), average socio-economic profile, and manageable debt burden.
• Town of Buckeye's Miller Road Improvement District Bonds, AZ: Moody's upgraded this town s Series 2001 road improvement district bonds to A2 from A3. The A2 rating reflects the improved general credit characteristics of the town including sustained sizeable general fund reserves, low debt burden and despite recent declines in assessed values, the expectation that taxable values will return to growth in the near term. The rating also incorporates the limited pledge of special assessments for payment of debt service and the additional security provided by the Town of Buckeye (not rated) as a contingent guarantor.
• Touro Infirmary, LA: Moody's upgraded this infirmary s rating from Baa2 to Ba1. The rating upgrade and stable outlook are attributable to operating improvement and a marked strengthening of the balance sheet across the past 2.5 years, which has occurred since the affiliation with Louisiana Children's Medical Center (LCMC) and Children's Hospital (Children's) in 2009. The addition of new physicians, strengthening of the service array, and enhancement of the residency programs have resulted in volume and revenue growth with further revenue enhancement through the receipt of upper payment limit (UPL) funds.

Downgrades

• King's Daughters' Medical Center, KY: Moody's downgraded this medical center to A2 from A1. The downgrade to A2 and the negative outlook stem from material operating losses in FY 2013 driven by volume declines, insurance payment delays, and new expenses as management seeks to improve financial performance in a challenging operating environment.
• Successor Agency to the City of Azusa Redevelopment Agency, CA: Moody's downgraded this successor agency from Ba1 to Ba2. The downgrade reflects the weak coverage ratios for the agency's entire debt service payments net of all pass-through obligations, notwithstanding the relative strengths of the project area's size, diversity of taxpayers, and solid total assessed value to incremental value.
• South Whittier Elementary School District, CA: Moody's downgraded this school district from A1 to A2. The downgrade primarily reflects the district's extremely narrow liquidity brought on by state funding deferrals, declining enrollment and deficits in earlier years. While the district's financial position is expected to improve slightly due to increasing enrollment and a reduction in apportionment deferrals from the state, the district's liquidity is expected to remain narrow, limiting its financial flexibility. The rating also incorporates the district's growing tax base and manageable debt burden.
• North Jay Water District, ME: Moody's downgraded this water district to Baa2 from Baa1. The downgrade to Baa2 reflects the district's weak bondholder security; challenged financial position evidenced by narrow debt service coverage; and highly leveraged debt. The rating also incorporates the district's small but stable customer base.
• Cook County Forest Preserve District, IL: Moody's downgraded this district to Aa2 from A1. The downgrade of the GO rating reflects the district's growing pension liabilities, which are a consequence of statutorily-mandated contribution levels that are not based on actuarial standards of the Forest Preserve District Employees' Annuity and Benefit Fund of Cook County.
• Virgin Islands Water and Power Authority: Moody's downgraded this water and power authority from Ba1 to Baa3. The rating downgrades and negative outlook reflect the persisting weakness in VIWAPA's credit metrics and liquidity, along with a challenging economic environment, including high unemployment and other weak economic indicators compared to the United States averages.
• Lutheran Senior Services, MO: Moody's downgraded the letter of credit-backed rating for this senior services' bonds to A3/VMIG 2 from Aa3/VMIG 1 in conjunction with the substitution of the existing letter of credit supporting the bonds with a new letter of credit provided by Bank of America, N.A. The ratings are based on the credit quality of the bank and the structure and legal protections of the transaction, which provide for timely payment of debt service and purchase price to bondholders.
• Omaha Public Power District, NE: Moody's downgraded this public power district's senior lien rating to Aa2 from Aa1 and subordinate lien rating to Aa3 from Aa2. The downgrade of the long-term ratings reflects OPPD's continuing challenges of operating its single unit nuclear plant that has incurred an extended outage for almost 2.5 years, indicating a higher business risk profile compared to other similarly rated public power utilities.
• Grosse Pointe Public Schools, MI: Moody's downgraded this public schools district's general obligation bonds to Aa2 from Aa1. The downgrade reflects the district's weakened financial position following four consecutive operating deficits. Continuing to support the Aa2 rating are a sizeable tax base, strong socioeconomic profile, and manageable debt burden. The negative outlook reflects the district's modest reserve levels which provide limited flexibility to offset potential budget variations.
• Metropolitan Water Reclamation District of Greater Chicago, IL: Moody's downgraded this water reclamation district's general obligation unlimited (GOULT) and limited tax (GOLT) bonds to Aa1 from Aaa. The downgrade of the GO rating reflects the district's outsized pension liabilities, which have grown due to contribution levels that have fallen short of actuarial standards. The downgrade also reflects the significant debt burden and pension liabilities of overlapping entities, particularly the City of Chicago (GO rated A3/negative outlook), which represents half of the district's tax base.
• Miami-Dade County Port Facility, FL: Moody's downgraded this port facility's outstanding seaport revenue bonds from A2 to A3. The downgrade of the port's rating is based on the substantial increase in leverage, and the transformation of its debt profile and much tighter financial margins resulting from the current offering. After the Series 2013, the port is expected issue an additional $400 million of debt through 2017 and the bulk is expected next year.
• Carrizozo Municipal School District, NM: Moody's downgraded this municipal school district's general obligation rating to Baa2 from Baa1. The downgrade to Baa2 reflects the district's ongoing operational imbalance that has resulted in narrow reserves, limited tax base, and below average socioeconomic indices. The rating also incorporates the district's manageable debt burden with rapid principal amortization.
• Glendale, AZ: Moody's downgraded this city s GOULT rating from A2 to A3. Moody's also downgraded the city's senior lien excise tax bonds to A2 from A3, and the city s subordinate lien excise tax bonds from A3 to Baa1. The transportation excise tax bonds have been downgraded to A3 from A2, and the street and highway user revenue bonds (HURF) have been downgraded to A3 from A2. The downgrade of the GOULT rating primarily reflects unusually weak management practices denoted by ongoing internal and state controlled investigations of certain financial actions dating back to 2009.
• University Place, WA: Moody's downgraded this city s outstanding limited tax general obligation debt from A2 to A3. The downgrade primarily reflects the city's high General Fund debt burden, instability in General Fund finances, and a sustained decline in taxable values. The rating also reflects the city's participation in the broader Puget Sound economy, somewhat high socioeconomic profile and relatively large tax base.