Standard & Poor's Ratings Services said it lowered its underlying rating on King City Public Financing Authority, Calif.'s certificates of participation issued for King City to BBB from A and placed the rating on CreditWatch with negative implications.

"The rating action reflects our view of the city's increased and material interfund borrowing from the sewer fund coupled with negative fund balances in multiple city funds — including the city's general fund — which led the city's auditor to raise doubt about the city's ability to continue as a going concern," said Standard & Poor's credit analyst Tim Tung.

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