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CALIFORNIA $1.3 BILLION GO BONDS RATED 'AA' BY FITCH -- FITCH FINANCIAL WIRE --

 CALIFORNIA $1.3 BILLION GO BONDS RATED 'AA' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Oct. 9 /PRNewswire/ -- California's $1.3 billion various purpose general obligation bonds, to be offered for bids on Oct. 14, are rated 'AA' by Fitch. The 'AA' rating assigned to $15.7 billion outstanding general obligations is affirmed. The new bonds will be due Oct. 1, 1993-2022, either serially or by redemption from mandatory sinking fund installments. They will be callable beginning Oct. 1, 2002, at 102 percent. The state's full faith and credit are pledged to general obligation bonds, subordinated only to the support of the public school system and public institutions of higher education.
 The state's debt position continues to be favorable, and, after this sale, gross state debt will be $25.2 billion; net tax-supported debt will amount to $15.8 billion, or $527 per capita and 2.5 percent of personal income. Debt service represents about 3 percent of general fund revenues.
 California has been 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 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. However, 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 such as the mandate that education receive a fixed proportion of general fund resources.
 The credit trend for California's general obligation bonds is now uncertain, reflecting both the unclear course of the economy and the state's as yet unproved ability to shape financial expectations to prevailing conditions.
 -0- 10/9/92
 /CONTACT: Claire G. Cohen of Fitch, 212-908-0552/ CO: ST: California IN: SU: RTG


AH -- NY076 -- 8528 10/09/92 16:57 EDT
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Publication:PR Newswire
Date:Oct 9, 1992
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/C O R R E C T I O N -- FITCH/(Correction Notice)

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