Rating of State Bonds Is Reduced

California’s $25.4 billion of debt was downgraded for the second time this year after a slowing economy slashed the state’s revenue projections, Moody’s Investors Service said.

The rating was cut over concern that the state’s budget and cash reserves “will weaken substantially over the next 18 months,” Moody’s said. The credit rating company said last month it might cut the rating, partly because of delays in selling bonds to reimburse the state for energy spending.

Moody’s cut its rating on $19.9-billion in state general obligation bonds by one notch, to “A1” from “Aa3,” after a similar one-rung downgrade in May.