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Second Bond Rating Agency Downgrades California Bonds Due to Redevelopment Ruling

January 24, 2012
Today another bond rating agency, Fitch Ratings, placed all California tax allocation bonds on Rating Watch Negative. This action underscores the importance of the Legislature enacting SB 659 (Padilla) to extend the deadline for implementation of the redevelopment agency dissolution contained in ABx1 26 from Feb. 1 to April 15, 2012.
 

Fitch cites in its news release the uncertainty created by the vague legislation and the "apparent lack of progress in resolving a number of inconsistencies and uncertainties contained therein."

Take Action Now!

The League urges city officials to notify their legislators that this is the second rating agency in the last week to take such adverse action and to urge the Legislature to extend the Feb. 1 deadline for dissolution so the Legislature can carefully assess the steps it must take to reassure private investors and rating agencies that the state will not harm the integrity of these important financial. This can be done by passing SB 659 (Padilla) to delay the dissolution deadline until April 15.



 
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