Standard & Poor’s has downgraded two cities’ gas tax-secured certificates of participation to A-minus from A, citing mid-year state budget cuts that will delay payments from the pledged revenue source. The outlook is stable.

Late last year, Oxnard and Santa Ana issued bonds secured by their share of future revenue from California’s 18-cent-per-gallon tax on gasoline, a portion of which is distributed to local governments based on pre-set formulas. The cities used the bond proceeds to accelerate their street improvement programs.

Facing a sizable state budget deficit, state lawmakers made some mid-year adjustments this year, including borrowing from the gas tax fund that is to be distributed to local governments.

“For the city, this means the disbursements it would have received in March, April, May, June, July, and August of 2008 will be delayed until September,” analyst Rob Williams said in a news release Monday announcing the Oxnard downgrade. “Currently, the city expects that gas tax receipts will be sufficient, despite the state borrowing, to make payments without reliance on other city funds. However, the state’s recent willingness to borrow from these funds could present additional credit risk going forward.”

Another deal that is to use the same security, a $13.7 million transaction planned by the California Statewide Communities Development Authority for the cities of Coalinga and Indio, received an initial A-minus rating last week from Standard & Poor’s.

MBIA Insurance Corp. wrapped the Santa Ana deal. The Oxnard deal was insured by XL Capital Assurance, currently rated A-minus and on negative watch by Standard & Poor’s.

Standard & Poor’s provided the only underlying ratings on the Santa Ana and Oxnard deals.

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