Fitch Ratings said it assigns an A rating to $2.29 billion in general obligation bonds of the state of California, consisting of: $940 million various purpose GO bonds; $200 million various purpose GO bonds (green bonds); $950 million various purpose GO refunding bonds; and $200 million GO bonds (mandatory put bonds).
The bonds will be sold via negotiation on Sept. 23.
The rating outlook is stable.
The state has benefitted from institutionalized changes to fiscal management in recent years, which, when combined with the ongoing economic and revenue recovery, have enabled it to materially improve its overall fiscal standing. Progress includes timely, more structurally sound budgets, spending restraint, and continued sizable reductions in budgetary debt.
The economy is wealthy and unmatched among U.S. states in its size and diversity. After severe, widespread recessionary conditions, growth has resumed, including in California's housing market.
Tax-supported debt is moderate, but has grown for infrastructure needs and budgetary borrowing. Pension funded ratios have declined and there is a history of inadequate contributions to the teacher system; however, the state has instituted some benefit reforms and the fiscal 2015 enacted budget provides the first installment of a long-term plan to increase funding of the teacher pension system.
