Lynwood PFA, Calif., Lease Revs Downgraded to BBB by Fitch

Fitch Ratings said it has downgraded to BBB from BBB-plus Lynwood Public Finance Authority, Calif.'s $5.2 million lease revenue refunding bonds (public capital improvement project), series 2003A; $8.7 million lease revenue bonds (civic center improvement project), series 2010A;  and its implied unlimited tax general obligation bonds (GO) to BBB-plus from A-minus.

The rating outlook is revised to negative from stable.

The bonds are secured by lease rental payments from the city of Lynwood to the authority for use of various essential assets, subject to abatement. The bonds are also secured by cash-funded debt service reserve funds.

The downgrade and revision in outlook to negative reflects Fitch's concern regarding the city's ongoing fiscal imbalance, low cash position, and very low fund balance with limited prospects for material improvement. Significant labor concessions are necessary to balance the current fiscal year budget.

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