LOS ANGELES —California State Public Works Board lease revenue bonds were affirmed ahead of plans to issue $210 million to fund prison construction projects.
The bonds will be sold competitively on Oct. 29.
Standard & Poor’s, Fitch Ratings and Moody’s Investors Service affirmed A-plus, A, and A1 ratings on the bonds, respectively.
"The ratings reflect our opinion of the state's underlying general creditworthiness and indenture provisions that we view as strong," said Standard & Poor's credit analyst Gabriel Petek.
The bonds fund prison health facility projects. The state’s prison health care system has been in federal receivership since 2006.
The healthcare system was placed under federal control in late 2005 by U.S. District Judge Thelton Henderson in an adverse ruling after the Prison Law Office filed a lawsuit against the state. California officially ceded control in 2006.
A federal three-judge panel found in 2009 that prison overcrowding was the main cause of substandard prison healthcare and ordered the state to reduce its prison population. In 2011, California launched a prison realignment plan that shifted non-violent offenders from state prison to county jails.
Voters approved a series of propositions that reduced penalties for low level offenders and reduced the prison population below the prison population level stipulated by the judges in January 2015, according to a September
But Folsom State Prison is the only state prison that has been moved out of receivership, according to the report.
Bond proceeds will finance and refinance the design and construction costs related to the health care facility improvements at 10 corrections facilities.
SPWB has approximately $11 billion in outstanding lease revenue bonds and other state facility lease revenue bonds as of Sept. 1, 2015, according to S&P.
