San Diego’s Debt Rating Cut by Fitch

San Diego’s debt rating was cut by Fitch Ratings, which said the resignation of Mayor Dick Murphy and criminal investigations were preventing the seventh-largest U.S. city from shoring up its finances.

Fitch cut its rating on a total of $1.95 billion of San Diego bonds. Some $22 million of general obligation debt was lowered by two steps to BBB-plus, while $250 million of lease-backed debt was cut by three levels to BBB-minus, the lowest of Fitch’s 10 investment-grade ranks. Fitch cut an additional $1.67 billion of bonds sold by city authorities by two steps, to ratings of BBB-plus and BBB, depending on the issuing agency.

In the last year, Moody’s Investors Service has lowered San Diego’s credit rating three notches, while Standard & Poor’s withdrew its rating on the city because it hadn’t filed its fiscal 2003 financial statement.