CalPERS, CalSTRS see long-term credit ratings lowered

The L.A. Times reports:

Hurt by big investment losses, California's two biggest state-run pension funds lost top long-term credit ratings from Moody's Investors Service on the insurance they sell to municipal governments to make it easier for them to sell bonds.

Moody's blamed the downgrade on steep losses suffered by the funds, which could affect their future ability to meet obligations to retirees.

"Today's rating action reflects our expectation that the cumulative back-to-back market value declines in the investment portfolios of both CalPERS and CalSTRS for the fiscal years ended June 2008 and 2009 will exacerbate long-term projected actuarial funding shortfalls, recent market gains notwithstanding," said Martin Duffy, Moody's vice president and senior credit officer.

Great moments in Blue America.