S&P Global Ratings said it assigned its AA-minus long-term rating, and stable outlook, to California's estimated $2.4 billion of general obligation bonds.
The issue consists of $500 million in tax-exempt GO bonds and $1.9 billion in tax-exempt GO refunding bonds.
At the same time, S&P said it affirmed its AA-minus long-term ratings and underlying ratings (SPURs) on California's $73.7 billion of GO bonds outstanding, as of Jan. 1, 2017.
In addition, it affirmed its A-plus long-term ratings and SPURs on the state's $9.6 billion of lease revenue appropriation-backed debt. The outlook on all ratings is stable.
Finally, it affirmed the long-term component of the AA/A-2, AA-plus/A-1, and AAA/A-1-plus ratings on some of the state's GO variable-rate demand bonds.
The long-term component of the ratings is based jointly (assuming low correlation) on that of the obligor, California, and the various letter of credit (LOC) providers. The short-term component of the ratings is based solely on the ratings of the LOC providers.
"The GO ratings are based on our view of the state's diverse economy, demonstrated commitment in six consecutive budgets to aligning recurring revenues and expenses while paying down budgetary debts, good and increasing budgetary reserve levels, and robust overall liquidity in fiscal 2017," said S&P credit analyst Gabriel Petek.
