News Column

Fitch Affirms Ratings on Certain California State GO-Linked Debt

July 29, 2014

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 millionCalifornia Judgement Trust certificates of participation (COPs) series 2005;

--$9.235 millionShafter Joint Powers Financing Authority lease revenue bonds series 1997A;

--$9.235 millionTaft 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

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Karen Krop

Senior Director

+1-212-908-0661

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Douglas Offerman

Senior Director

+1-212-908-0889

or

Committee Chairperson

Marcy Block

Senior Director

+1-212-908-0239

or

Media Relations

Elizabeth Fogerty, New York, +1-212-908-0526

elizabeth.fogerty@fitchratings.com

Source: Fitch Ratings


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