Moody’s Investors Service has downgraded to Aa3 from Aa2 the rating assigned to the California Department of Veterans Affairs home purchase revenue bonds.
The rating downgrade affects approximately $695 million of outstanding bonds. The outlook on the credit has been revised to stable from negative.
Cal Vets is a separate legal entity, acting as a cabinet-level agency of the state of California that is authorized to issue revenue bonds to fund low-interest farm and home loan contracts with veterans living in California.
Cal Vets issues Baa1-rated general obligation bonds that were not the subject of the current review and therefore not affected by the negative rating action. The general obligation bonds are directly linked to the state’s general obligation rating.
