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California Credit Quality And Ratings Are At A Crossroad Jun 11
Standard & Poors, June 2011
Abstract
As fiscal 2012 approaches, Standard & Poor's Ratings Services sees California's credit rating (A-/Negative) at a crossroad. Based on the application of our criteria, we believe California's near-term credit quality is affected by its budget situation more than most states because of the implications for the state's cash position. In our view, the budget process is significant in California's credit profile because if a budget is not adopted in time for the state to issue its revenue anticipation notes (RANs) before its cash runs low, the state's basic operating liquidity can become inadequate. But beyond near-term financial liquidity, we believe budget politics in California already impede the state's long-term credit quality as well. As the governor's revised budget proposal, released...
Companies mentioned in this report are: California
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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