This week started off strong, with the DJIA and S&P 500 hitting all time highs on Wednesday as investor euphoria took over following the Federal Reserve's announcement that it will not start tapering bond purchases yet. Thursday and Friday saw slight pullbacks in the markets, even though the economic data releases from Thursday showed promise: Existing home sales rose 1.7% for the month, while economists had predicted a drop of 2.6%, and jobless claims rose for the week to 309,000 from last week's 294,000, but still came in below the estimate of 330,000. Treasury bonds rose following the Fed's bond tapering announcement on Wednesday, but then fell back down on Thursday as the encouraging economic data for the day reminded bond investors that the Fed will eventually start scaling back its bond purchases. Below, we go over Moody's municipal bond upgrades and downgrades for the week.

Upgrades

• Ohio Housing Finance Agency, OH: Moody's upgraded this finance agency to Aa1 from Aa2. The rating is based on the high credit quality of the GNMA security, strong legal structure, and cash flow projections that demonstrate asset-to-debt ratios above 100% and sufficient revenues to pay timely debt service for the life of the bonds.
• Southern California Public Power Authority, CA: Moody's upgraded this power authority to A3 (review for downgrade) from Baa1. As a result of the successful outcome of the solicitation of a majority of bondholders to amend the transaction documents, upon execution of the amended transaction documents expected September 19, 2013, the rating on the Bonds will no longer takes into account the ratings of both AIG, Inc. and National Public Finance Guaranty Corp. (both Baa1).
• Whitman College, WA: Moody's upgraded this college's Series 2008 variable rate demand bonds to Aa3/VMIG 1 from Aa3/VMIG 2. Whitman's conservative financial management practices resulting in positive operating performance and healthy financial resources are key drivers of the rating and stable outlook.
• Lower Dauphin School District, PA: Moody's upgraded this school district to Aa3 from A1. The underlying rating upgrade reflects the district's moderately sized and growing tax base and favorable financial position with notable increases in reserves. The rating also considers the district's manageable debt burden and rapid amortization of principal.
• Successor Agency to the Los Angeles Community Redevelopment Agency, CA: Moody's upgraded this successor agency to Baa3. The rating upgrade is driven by changes to California law that dissolved redevelopment agencies (RDAs) and changed the method by which the successors agencies to the RDAs receive incremental tax revenues to pay debt service on tax allocation bonds.

Downgrades

• Stockbridge Community Schools, MI: Moody's downgraded this community schools to A1 from Aa3. The downgrade primarily reflects the district's narrow reserve position in audited fiscal 2013 results, limited budgetary flexibility and ongoing operating pressure resulting from a steadily declining trend in enrollment. The current rating also incorporates the district's low debt burden, modest full valuation, and exposure to an underfunded cost-sharing pension plan.
• Macon & Dewitt Counties, IL: Moody's downgraded these counties to Baa3 from Baa1. The downgrade to Baa3 from Baa1 reflects the district's negative General Fund position, with continuing reliance on its Working Cash Fund to provide operational liquidity, and our expectation that General Fund and Working Cash Fund reserves will remain extremely pressured in the near term.
• Laingsburg Community School District, MI: Moody's downgraded this school district to A1 from A2. The downgrade to A2 primarily reflects the district's very narrow reserve position reflected in preliminary fiscal year 2013 results and likely continuance of operating pressure resulting from a steadily declining trend in enrollment. The current rating also incorporates the district's high debt burden, modest full valuation near the state capital, and exposure to an underfunded cost-sharing pension plan.
• MaineGeneral Medical Center, ME: Moody's downgraded this medical center to Ba1 from Baa3. The downgrade reflects the organization's downturn in financial performance in FY 2013 and the expectation that FY 2014 financial performance will be materially weaker than FY 2013 performance levels (based on a management-provided budget) and significantly lower than prior projections.
• Imperial Community College District, CA: Moody's downgraded this community college district's general obligation bonds to A1, and its debt and lease-backed certificates of participation to A3. The downgrade reflects the deterioration of the district's finances, which is demonstrated by declining reserve levels and a negative net cash position. The key drivers for this decline include the district's significant exposure to state cuts and deferrals, depressed enrollment, and limited financial flexibility stemming from concessions made in historical collective bargaining agreements.
• Crittenton Hospital Medical Center, MI: Moody's downgraded this medical center to Baa3 from Baa2. The downgrade to Baa3 reflects Crittenton's unfavorable financial performance with operating cash flow margins below 3% in each of the past three years and weakening debt service coverage metrics. While Crittenton's balance sheet is favorable to Baa3 medians, it has declined in recent years with capital spending, contributions to the pension, and low cash flow.
• DeKalb County School District, GA: Moody's downgraded this school district to A1 from Aa3. The downgrade to A1 reflects the district's weakened financial profile, including its draft unaudited results of negative fund balance in fiscal 2012, pending accreditation status and several ongoing lawsuits. The rating also incorporates the district's sizable tax base with above average, albeit weakening, socioeconomic factors and manageable debt burden.
• Wauseon Exempted Village School District, OH: Moody's downgraded this school district to A1 from Aa3. The downgrade to A1 reflects the district's weakened financial position due to ongoing operating deficits, including a reported operating deficit in fiscal 2013, and a projected deficit for fiscal 2014.
• Gobles Public School, MI: Moody's downgraded this public school to A2 from A1. The downgrade reflects the district's weakened financial position following five consecutive draws on reserves and an above average direct debt burden that is expected to increase. The A2 rating also incorporates a modestly-sized tax base, average resident wealth and income levels, and an above average pension liability.
• Baptist Healthcare System Obligated Group, KY: Moody's downgraded this group to A2 from A1. The rating downgrade reflects continued weakening of operating cash flow generation to very low levels in interim FY 2013 performance partly driven by continued growth in losses in the physician employment strategy along with operating losses from recently acquired facilities. The operating losses are weaker than we anticipated and are likely to continue through the remainder of the fiscal year.