S&P: California State Public Works Board's 2016C&D Lease Revenue Refunding Bonds Assigned 'A+' Rating
In addition, S&P Global Ratings affirmed its 'A+' rating, with a stable outlook, on approximately $9.83 billion of SPWB's LRBs and other state facility LRB issues outstanding as of Aug. 1, 2016.
"The ratings reflect our opinion of the state's underlying general creditworthiness," said S&P Global Ratings credit analyst Gabriel Petek. "The ratings further reflect our view of indenture provisions that include the covenant to budget and allocate lease payments, combined with statutory protection against strong nonappropriation risk," Mr. Petek added.
Officials intend to use series 2016C LRB proceeds to refinance and defease a portion of the SPWB's series 2009I LRBs.
The stable outlook matches our outlook on the state GO debt rating. The stable outlook reflects, in part, that California's finances have been brought into structural alignment (recurring revenue support the state's ongoing expenditure base).