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California; General Obligation; Note Oct 08
Standard & Poors, Oct 2008
Abstract
On Oct. 10, 2008, Standard & Poor's Ratings Services assigned an 'SP-1' rating to California's $4 billion revenue anticipation notes (RANs) and placed the 'A+' general obligation (GO) rating on CreditWatch with negative implications. The 'SP-1' rating on the RANs is, in Standard & Poor's opinion, supported by: The availability of borrowable resources in other non-general funds which provide excess coverage to support note repayment. Although the state is currently offering $4 billion in notes, we believe the cash flows can readily support borrowing of up to $7 billion. Projected good 1.89x cash flow note coverage at maturity, assuming the state issues the full $7 billion of notes it intends to sell this month. Certain actions that appear to have...
Companies mentioned in this report are: California
Action: New Rating
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: Full Analysis
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