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CALIFORNIA $2 BILLION REVENUE ANTICIPATION WARRANTS 'F-1+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, June 11 /PRNewswire/ -- California's $2 billion 1993 Revenue Anticipation Warrants (RAWs) are rated "F-1+" by Fitch. The warrants will be sold competitively June 16. The RAWs will be dated June 23, mature Dec. 23, and are callable at par on any date beginning Aug. 10.
 The warrants' rating is based on the irrevocable commitment from three financial institutions to bid on refunding warrants, although there are substantial nongeneral fund resources available for borrowing at warrant maturity. However, the warrants most likely will be redeemed prior to maturity from state interim notes or revenue anticipation notes (RANs) once a fiscal 1994 budget is adopted.
 RAW proceeds will be used to provide cash for state operations during the last week of fiscal 1993 and up to the first six months of fiscal 1994. The issue is sized to allow the state to operate without resorting to registered warrants (as was done in early fiscal 1993) if a budget for fiscal 1994 is not passed soon. If the warrants remain outstanding until their scheduled maturity, the projected cash flow for 1994 indicates that the state will have sufficient funds available, including borrowable reserves, to pay the warrants but the estimates are based on state operations without an enacted budget. Warrant repayment is covered 2.25 times.
 To further secure the warrants, the state has received irrevocable commitments totaling $4.5 billion from Goldman, Sachs & Co., J.P. Morgan Securities Inc., and Shearson Lehman Brothers Inc. to bid on refunding warrants, which would be used to redeem this issue at maturity in the event that both the general fund's and the other borrowable funds' performance falls significantly short of expectations.
 California's original budgetary and cash flow expectations will not be met this year, as the economic and financial weakness continues. As a result, an additional $3 billion in RANs were needed, issued in April and maturing June 24. As projected in April, California expects to be able to retire the RANs from internal sources, although the margin is slim. Operating borrowing is still necessary for state operations and the RAW's will refinance two thirds of the April borrowing. In conjunction with the additional RANs, four financial institutions executed standby warrant bid agreements, with commitments totaling $5 billion.
 -0- 6/11/93
 /CONTACT: Amy S. Doppelt, 212-908-0514, or Claire G. Cohen, 212-908-0552, both of Fitch/


CO: ST: California IN: SU: RTG

TS -- NY056 -- 1198 06/11/93 16:19 EST
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Date:Jun 11, 1993
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