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CALIFORNIA PUBLIC WORKS BOARD BONDS RATED 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

 CALIFORNIA PUBLIC WORKS BOARD BONDS RATED 'A+' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Oct. 21 /PRNewswire/ -- The State Public Works Board of the State of California's $140 million (approximately) lease revenue bonds (Secretary of State and State Archives Building Complex), 1992 Series A, are rated "A+" by Fitch. The bonds will be sold through negotiation by a syndicate led by Smith Barney next week. The credit trend is uncertain.
 The rating is based on the project's essentially strong legal features, and the state's long-term creditworthiness. California is facing both economic and financial problems. The long-term outlook has declined, as the recession continues to be deeper than expected and employment loss is very significant, even though the full impact of defense industry reductions is yet to be realized. The budget for 1992-93 seeks to address the $2.2 billion general fund deficit accumulated through June 30, 1992, but adjustment to a changing economic and financial environment may have to extend over a period of years, and will be complicated by restrictive effects of initiative requirements. The uncertain credit trend for this issue, California's other lease debt, and the state's general obligation bonds reflects both the unclear course of the economy and the state's as yet unproven ability to shape financial expectations to prevailing conditions.
 Bond proceeds will be used to finance the construction of an office building for the Secretary of State, an adjacent building to house the State Archives, and a parking structure a few blocks away. All components of the project are considered part of the complex, and are leased to the Department of General Services under one facility lease. The department will make lease rental payments to the Public Works Board, which are then pledged to the bondholders. The Secretary of State will reimburse the department for the lease payment, and both the secretary and the department covenant to include the lease payment in their annual budgets. The obligation to make the rental payment remains that of the department even if the reimbursements are not forthcoming from the Secretary. Bond security includes a debt service reserve funded equal to maximum annual debt service provided for from bond proceeds.
 -0- 10/21/92
 /CONTACT: Amy S. Doppelt, 212-908-0514, or Claire G. Cohen, 212-908-0552, both of Fitch/ CO: Public Works Board of the State of California ST: California IN: UTI SU: RTG


GK -- NY125 -- 3144 10/21/92 17:12 EDT
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Publication:PR Newswire
Date:Oct 21, 1992
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