Moody’s Investors Service Wednesday assigned its Aaa global scale rating to $50 million of taxable general obligation bonds California plans to issue next week.
The taxable sale is a small piece of a $1.75 billion state GO issue.
Moody’s had already affirmed its A1 municipal scale rating and stable outlook on the bonds.
The distinction between Moody’s global scale and municipal scale ratings has attracted state Treasurer Bill Lockyer’s ire. He has launched a campaign asking for rating agencies to eliminate distinctions between corporate and municipal debt ratings, saying munis are systematically underrated compared to corporate bonds based on their real default risk.
Moody’s has announced plans to offer global scale ratings to tax-exempt issues starting next month.
Morgan Stanley is the book-runner for next week’s bond sale, which has a total of 30 firms in the syndicate. Pricing is slated Thursday after a retail order period Tuesday and Wednesday.
The $50 million taxable component will finance some clean water, watershed, and flood protection projects, according to the preliminary official statement.
Standard & Poor’s affirmed its A-plus rating and stable outlook for California GOs on Wednesday. A new Fitch Ratings report was not available at press time. Its most recent rating for California was A-plus and stable.
