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CALIF. PUBLIC WORKS BOARD $100.5 MIL BONDS 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 15 /PRNewswire/ -- The State Public Works Board of the State of California's $100.5 million lease revenue bonds (The Trustees of The California State University) 1993 series A (various California State University projects) are rated "A+" by Fitch. The bonds will be sold through negotiation by a syndicate led by Grigsby Branford & Co., Inc. on Sept. 21. The credit trend is uncertain.
 The overall strength of the California State University (CSU) system, its operation as a state agency, the leased assets' integral role in the university's academic programs, and strong legal features provide assurance of legislative appropriations and rental payment. The leased facilities, including classrooms, laboratories, faculty offices, and equipment will be located at nine of the university's 20 campuses.
 California's long-term credit prospects have weakened, as the recession continues to be deep. The state has built up a large accumulated deficit over this period. While budget plans call for elimination of the deficit, and revenues have been on target for several months, restoration of financial stability has yet to be accomplished. The uncertain credit trend reflects the economy's unclear course, as well as the state's unproven ability to realize its budget forecasts.
 This issue is the sixth financing sold by the State Public Works Board for projects to be leased to the university. Legal provisions in the leases and indenture include the trustees' covenant to take all action necessary to include lease rental payments in its annual budget and make the allocation for rental payments. The trustees will use state appropriations to make the rental payments, but also pledges to use other legally available revenue, if necessary. State-provided funds accounted for 53 percent of the university's $2.9 billion fiscal 1992 operating revenue, down from 60 percent the previous year and as high as 66 percent in the mid-1980s. State statute requires that the first dollars appropriated by the state be used to pay lease rentals to the board. While this issue and a large sale in 1992 substantially increased the amount of State Public Works Board debt for the university and hence the annual lease rental expense, the amount remains well within the means of the university and state.
 -0- 9/15/93
 /CONTACT: Amy S. Doppelt, 212-908-0514 or Claire G. Cohen, 212-908-0552, both of Fitch/


CO: ST: California IN: SU: RTG

LG -- NY068 -- 2311 09/15/93 14:34 EDT
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Date:Sep 15, 1993
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