Standard&Poor's Rating Services assigned its 'BBB' rating, and stable outlook, to Philadelphia, Pa.'s series 2008A general obligation (GO) refunding bonds. At the same time, Standard&Poor's affirmed its 'BBB' rating and underlying rating (SPUR) on the city's parity debt. The outlook is stable. The ratings reflect the following weaknesses: The city's operating results have been historically erratic, although its financial position has improved over the past three years. The city continues to face cost increases related to health care and pensions, which, coupled with expiring union contracts and expected continued tax rate cuts, will pressure future financial operations. There are continuing longstanding fiscal problems at the Philadelphia School District and Philadelphia Gas Works (PGW), which in the
