PHOENIX - Standard & Poor's assigned an A-plus long-term rating to San Francisco State Building Authority's lease revenue refunding bonds and Oakland State Building Authority's lease revenue refunding bonds.

The San Francisco issuance will be about $103 million, and the Oakland issuance about $59 million. The lease revenue bonds are separately secured by state lease payments under each authority's respective lease agreement, and will refinance older debt.

The San Francisco authority is refinancing its series 2005A lease revenue bonds while the Oakland authority is refinancing its series 1998A bonds.

The SFSBA's series 2005 bonds refinanced the authority's series 1996 LRBs, which were issued to finance a 14-story state office building in San Francisco and a six-story office building. Those assets are leased to the state of California, acting through the Department of General Services, by the SFSBA under a lease-purchase agreement. The 1998 OSBA bonds financed the construction of a 23-story state office building in downtown Oakland which will continue to serve as the leased asset through a similar arrangement.

In rating the bonds, S&P noted the state's AA-minus credit rating, but also that California continues to struggle to reign in significant liabilities such as a $72 billion unfunded liability for retiree health care benefits.

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