NEW YORK - Moody's Investors Service said it has upgraded to Aa2 from A1, the rating on approximately $1.17 billion of outstanding state of California Veterans general obligation bonds issued by the California Department of Veterans Affairs.
The outlook on the bonds is stable.
This rating action concludes Moody's review of the bonds for possible upgrade.
The rating upgrade is based on a recent legislative change that revised the mechanics for payment of the bonds' debt service, the financial strength and contract performance of the program, the bonds primary and senior interest in the Veterans Farm and Home Building Fund of 1943 ("1943 Fund"), and the pledge of the state's full faith and credit.
Also reflected in the rating is the program's risk profile, particularly when compared with other programs in Moody's portfolio, and other factors such as the operating environment that may result in increased pressure on financial resources and profitability.
Moody's also maintains a Aa3 rating with a Stable outlook on approximately $677 million of Cal Vets home purchase revenue bonds.
