Friday, 03 July 2009

Calif. Bonds Totter as State Issues IOUs

Written by 

Schwarzenegger at budget news conferenceBack in February, California politicians and taxpayers received a wake-up call, but, apparently, the alarm wasn't loud enough to wake them.

On February 3, California's bond credit rating was downgraded below that of every other state by Standard & Poors, one of the Big 3 Wall Street rating agencies. The agency reduced its rating on $46 billion of California's general obligation bonds from "A+" to "A." While an "A" rating may not sound so bad, it's at the lower end of investment grade bonds; most states have "AA" or "AAA" ratings.