The city of San Diego's bond rating was downgraded today by Moody's Investors Service to A1 to Aa3 with a negative outlook. The rating downgrade was based on "new information that has come to light" which included two reports on the city's pension system that led Moody's officials to conclude that the city's finances were less carefully managed than previously believed. The Moody's downgrade follows Standard & Poor's Sept. 20 suspension of its credit rating of the city. Moody's last downgraded the city's bonds on Aug. 10.
City officials are considering whether to issue $200 million in pension obligation bonds to close a $1.1 billion funding gap. On Sept. 22, the San Diego City Council directed Lamont Ewell, city manager, to return in two weeks with an plan to implement recommendations made by the reports.
