Fitch Ratings assigns an 'A+' rating to $2.5 billion in State of California various purpose general obligation (GO) bonds. In addition, Fitch affirms the rating on approximately $40.9 billion in outstanding State of California GO and veterans GO bonds at 'A+'. The Rating Outlook is Stable. Fitch also affirms the rating on $9 billion in outstanding economic recovery bonds (ERBs) at 'AA-'. The GO bonds now offered are scheduled to sell via negotiation on June 20 with a syndicate led by Citi. Maturity and call features will be determined upon final negotiation.
Fitch's 'A+' rating on California's general obligation (GO) bonds reflects continued recovery from the financial crisis earlier this decade, the fundamental strength of the state's economy and moderate debt levels. These strengths are tempered by continued challenges to achieve structurally balanced operations, vulnerability to capital gains volatility and the slowing residential real estate market, and large capital requirements.
