Fitch Ratings on Wednesday affirmed the AAA/V1 fund credit and volatility ratings assigned to the Los Angeles Community Redevelopment Agency’s investment portfolio.
The portfolio had $267.9 million in assets under management as of Feb. 29.
Dissolution of California’s 400-plus redevelopment agencies began Feb. 1. , On Dec. 29, the state Supreme Court affirmed legislation eliminating the RDAs, which combined have $20 billion of debt outstanding.
Fitch analysts said the rating reflects the lowest vulnerability of losses as a result of defaults in securities and is based on the actual and prospective average credit quality of the portfolio’s investments.
Analysts also cited the portfolio’s diversification, its liquidity in relation to cash outflows, and the investment capabilities of the pool’s managers.
Fitch noted that the portfolio is expected to be liquidated in an orderly manner because of the dissolution of all redevelopment agencies.
The Community Redevelopment Agency’s investment portfolio will no longer be funding new projects, but redirecting cash from maturing securities to bank deposits.
Fitch said it will continue to monitor portfolio developments and maintain an active dialogue with the agency.
The three-member CRA board, appointed by the governor, is responsible for ensuring the portfolio’s compliance with its investment policy.
Union Bank is the principal custodian of the portfolio.