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CALIFORNIA GENERAL OBLIGATION, SOME AGENCY RATINGS ON FITCH ALERT NEGATIVE -- FITCH FINANCIAL WIRE --

 CALIFORNIA GENERAL OBLIGATION, SOME AGENCY RATINGS ON
 FITCH ALERT NEGATIVE -- FITCH FINANCIAL WIRE --
 NEW YORK, April 27 /PRNewswire/ -- The "AA+" general obligation rating of the state of California, as well as "AA" ratings assigned to certain state agency bonds, have been placed on Fitch Alert with negative implications. California's financial problems continue to grow, with the general fund deficit now expected to reach $3.7 billion at June 30, 1992. Revenues have continued to underperform the revised revenue projection made in January and there is little indication that the recession is lessening.
 The executive budget presented in January envisioned a much smaller problem than has developed. Should present trends continue, the financial problem may be too large to solve in a single year, as has been the past practice. The ratings placed on Fitch Alert will be evaluated in light of the budgetary plan when it is adopted.
 The disappointing revenues have had a very adverse impact on the general fund cash position, using up the cushion which was to be provided from borrowable resources in excess of estimated cash needs. Cash management options are currently in the process of review and implications for note repayment will be examined when conclusions are available.
 In a related action, the State Public Works Board of the State of California's $279 million Lease Revenue Bonds (The Trustees of California State University) 1992 Series A (Various California State University Projects) are rated "AA" by Fitch and placed on Fitch Alert with negative implications. The bonds will be sold through negotiation by a syndicate led by The First Boston Corp. this week.
 The bonds are secured by lease rental payments made by the Trustees of California State University to the State Public Works Board for the use and occupancy of the leased assets, 18 buildings and equipment projects, located at 13 of the university's 20 campuses. The university intends to use state appropriations to make the lease payments, and also pledges all other available revenue. The trustees covenants to include the lease payments in their annual budget request, and a state statute requires the university to use the first dollars appropriated by the state to make the payments.
 A complete list of ratings placed on Fitch Alert is as follows:
 State of California G.O. AA+
 Los Angeles St. Bldg. Auth. (St. of California
 Dept. of Gen. Serv. Lease) AA
 Regents of University of California (Chiller/
 Cogeneration Facility) COPs Ser. 1991 AA
 State Public Works Board
 Calif. Comm. Colleges Lease Rev. Bonds Ser. 1991A AA
 Department of Corrections
 Southern Maximum Security Complex
 Lease Rev. Bonds Ser. 1985A AA
 State Prison-Amador County Lease Rev.
 Bonds Ser. 1986A AA
 State Prison-Corcoran Lease Rev. Bonds
 Ser. 1986A AA
 State Prison-Del Norte Lease Rev. Bonds
 Ser. 1987A AA
 State Prison-Madera County Lease Rev. Bonds
 Ser. 1990A AA
 State Prison-Imperial County Lease Rev.
 Bonds Ser. 1991A AA
 Energy Efficiency Rev. Bonds Ser. 1986A & 1991A AA
 Franchise Tax Board (Central Office Proj.-Phase II)
 Lease Rev. Bonds Ser. 1991A AA
 Regents of University of California
 High Technology Facil. Lease Rev. Bonds
 Ser. 1986A AA
 High Technology Facil. Lease Rev. Bonds Ser.
 1987A AA
 High Technology Facil. Lease Rev. Bonds Ser.
 1988A AA
 Lease Rev. Bonds Ser. 1990A AA
 Trustees of California State University
 High Technology Facil. Lease
 Rev. Bonds Ser. 1986A AA
 Lease Rev. Bonds Ser. 1990A AA
 Lease Revenue Bonds, 1992 Ser. A (Various CSU
 Projects) AA
 -0- 4/27/92
 /CONTACT: Claire G. Cohen, 212-908-0552, or Amy S. Doppelt, 212-908-0514, both of Fitch/ CO: ST: California IN: SU: RTG


PS -- NY118 -- 3461 04/27/92 18:55 EDT
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Date:Apr 27, 1992
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