AAA rating

Moody’s warned it would downgrade Aaa-rated US states and municipalities if the country on the whole loses its top rating or if federal funding falls significantly as part of a plan to reduce the nation's deficit.

Inasmuch as most states and some municipalities rely heavily on federal funding for the operational purposes, they may appear vulnerable as the government plans to cut budget in the volatile economic environment, Moody's senior analyst Anne Van Praagh noted.