Moody’s Investors Service on Wednesday downgraded the municipality of Athens to Caa3 from Caa1 while it upgraded its prospects to “developing” from “negative”. The credit rating firm said this decision followed a recent downgrade of Greece’s rating to Ca and the close interconnection of the municipality’s finances with the central government. The municipality’s rating remains one notch above Greece’s credit rating as Moody’s believes that the municipality was not in a state of defaulting.