Standard & Poor's Ratings Services said it lowered its issuer credit rating to BBB from BBB-plus on San Fernando, Calif.
The outlook is stable.
"The lowered rating reflects our view of the city's very weak budgetary flexibility due to several consecutive years of operational imbalances," said Standard & Poor's credit analyst Kate Burroughs. "If the city's deficit fund balance deepens, liquidity deteriorates, or management's efforts do not result in ongoing balanced operations, we could further lower the rating."
San Fernando has an estimated population of about 24,000 and benefits from its participation in the greater Los Angeles economy. The city is located in the northeastern corner of Los Angeles County's San Fernando Valley, 25 miles from downtown Los Angeles along interstates 5 and 210.
