Copyright© 1999 by School Services of California, Inc.
By The Way. . .
S & P Increases California's Bond Rating. On August 10th, Standard
& Poor's announced that it had boosted its credit rating for the State
of California from "A+" to "AA-". The rating increase was received in connection
with the sale of $20 billion in general obligation bonds and was based on
California's strengthening economy, efforts to bolster reserves and budget
more conservatively, and the passage of this year's State Budget on time
(see what good things can happen when the Legislature gets things done on
time!).
Although the State should be proud of this achievement, what may surprise many folks is that thirty K-12 school districts and two community college districts have also earned a "AA-" or better rating for general obligation bonds, including fourteen K-12 districts with the superior "AA" rating. This is up from the count of fifteen "AA-" or better rated school districts in 1996. In addition, there are many other California school districts with credit ratings just slightly below these high levels.
California's school districts are well received by the bond market when they sell their bonds, with appropriately low borrowing rates. California school districts do not stand in the State's shadow when it comes to credit quality!
Editor's Note: SSC wishes to express thanks to Jonathan Edwards of Government Financial Strategies for writing this article. Questions about this article, or bond ratings in general, should be directed to Jonathan Edwards at (916) 444-5100.