Moody's Investors Service downgraded Connecticut's general obligation debt a notch Friday, citing the state's high fixed costs, low pension funding and depleted reserves.

The firm also revised the rating outlook to stable from negative.

Moody's said the new rating, which applies to about $14.6 billion in debt, is based on several factors. Connecticut has high combined fixed costs for debt service and post employment benefits relative to the state's budget, and its pension funded ratio is among the lowest in the country.

In the latest recession, Connecticut depleted its rainy-day fund and issued deficit bonds to fill budget gaps. Moody's noted that Connecticut's revenue trends improved sufficiently in fiscal 2011 for the state to cancel financing included in the fiscal 2011 budget.

However, because the state plans to use surplus funds to retire the deficit bonds ahead of schedule, that strategy reduces the amount of funds available for reserves in the near term, Moody's said.