NEW YORK--(BUSINESS WIRE)--In the course of routine surveillance, Fitch Ratings has affirmed the 'BBB+' ratings on the following appropriation backed bonds of the state of California, which are linked to California's 'A' general obligation (GO) bond rating:
--$42.8 million California Judgement Trust certificates of participation (COPs) series 2005;
--$9.235 million Shafter Joint Powers Financing Authority lease revenue bonds series 1997A;
--$9.235 million Taft Public Financing Authority lease revenue bonds series 1997A.
The Rating Outlook on the state's GO and related debt is Stable.
The ratings on the above bonds are directly linked to the state's GO rating, as outlined below, and the current rating action is an affirmation of those linkages. The state of California's GO debt is rated 'A' with a Stable Outlook. Fitch plans to review the state's GO bond rating next month in concert with the state's annual tax and revenue anticipation note issuance.
SECURITY
California Judgment Trust: secured by payments required to be made by the state, subject to annual appropriations, pursuant to a judgment stipulated between the state and plaintiffs relating to a 1986 flood.
Shafter Joint Powers & Taft Public Financing Authorities: secured by contract payments through the state department of corrections and rehabilitation, the sole source of lease rental payments made to each authority from each city, for use of low security correctional facilities. The state contractual payments cover debt service on the bonds and operating costs for the facilities.
KEY RATING DRIVERS
--GENERAL STATE CREDIT QUALITY: The ratings are all driven by the general credit quality of the State of California as reflected in its GO rating.
RATING SENSITIVITIES
--STATE GO RATING: The rating on all of the securities would change with changes in the state's GO rating.
For more information on the state's GO rating, see Fitch's press release 'Fitch Assigns 'A' Rating to $750MM California GOs; Outlook Stable' dated April 4, 2014, available on the Fitch web site at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Tax-Supported Rating Criteria' (Aug. 14, 2012);
--'U.S. State Government Tax-Supported Rating Criteria' (Aug. 14, 2012).
Applicable Criteria and Related Research:
Tax-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686015
U.S. State Government Tax-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686033
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=842362
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