S&P Downgrades California's Bonds Citing Energy Troubles

The Associated Press Published: Apr 25, 2001

SACRAMENTO (AP) - A major credit rating agency has downgraded California's state bonds, citing the financial drain from its continuing energy crisis. "The downgrade reflects the mounting and uncertain cost to the state of the current electrical power crisis, as well as its likely long-term detrimental effect on the state's economy," Standard & Poors said Tuesday.

The state's ability to repay its debts, while still considered adequate, has been reduced, S&P said in dropping the rating on California's general obligation bonds by two notches from AA to A+.

The agency said the rating was not reduced further because of California's diverse economy and a proposed revenue bond slated to reimburse the state's treasury. S&P said a further downgrade could occur if California does not follow through on plans to issue more than $10 billion in revenue bonds to pay off its energy-related debts.

The agency put the state's general obligation bonds on a credit-watch "with negative implications" Jan. 19, shortly after California began buying power for its two largest utilities, Southern California Edison and Pacific Gas and Electric Co.

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AP-ES-04-25-01 0443EDT

-- Anonymous, April 25, 2001

Answers

No surprise here. they have spent SIXTY PERCENT of their contingency- rainy day funds and they aren't even into the HOT weather yet.

They are going to follow PG&E and SCE down the oubliet.

the midden heap is going to get REAL crowded out there...

C

-- Anonymous, April 25, 2001