SAN FRANCISCO — California will sell up to $1 billion of revenue anticipation notes to Barclays Capital and JPMorgan next week in an effort to ease a cash crunch, according to the state treasurer’s office.

Tom Dresslar, a spokesman for the treasurer’s office, said the exact amount of the supplemental Ran sale is still undecided. The sale date is set for Wednesday.

The Rans are part of a $3.3 billion state budget plan that also includes payment deferrals and internal borrowing to help ease a cash shortage.

Controller John Chiang warned lawmakers earlier this month that the state would run out of cash starting at the end of the month unless it adopted the short-term measures.

Moody’s Investors Service said that cash shortage is a credit negative for the state.

California is still the lowest-rated states in the union, according to Standard & Poor’s and Fitch Ratings, both of which assign A-minus ratings. The state carries a more positive A1 rating, two notches higher, from Moody’s. Fitch and Moody’s have a stable outlook.

Earlier this week, Standard & Poor’s raised the state’s outlook to positive from stable citing an improving budget situation.

The extra note sale will come just before the state will go to market with its first general obligation bond issue this year on March 1 with around $2 billion of refunding GOs.

The treasurer has also set a sale of Department of Water Resources revenue bonds for Feb. 28, a public works lease revenue bond sale for mid-March and another GO deal for mid-April. The size of those deals still aren’t set.

The state also expects to sell its usual Ran deal in the fall to provide it with cash as its tax collections are heavily weighted toward the second half of the year.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.