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CALIFORNIA REVENUE ANTICIPATION WARRANTS RATED 'F-1+' BY FITCH -- FITCH FINANCIAL WIRE --

 CALIFORNIA REVENUE ANTICIPATION WARRANTS RATED 'F-1+' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, June 18 /PRNewswire/ -- The state of California's 1992 Revenue Anticipation Warrants, to be offered for bids on June 23, are rated 'F-1+' by Fitch. The warrants will be in an amount now estimated at $400 million but may be larger, to a total $750 million authorized. They will be due on July 24, 1992, and are not callable.
 The warrants are being issued to cover a net cash deficit in the state's general fund; the general fund will have exhausted its available internal borrowing capacity and a shortage of about $300 million will remain. The warrants are payable from unapplied money in the general fund of the state treasury, subject only to the prior application of moneys to the state's public school system and public institutions of higher education, general obligation debt service, and reimbursement of special funds to the extent required by law. If insufficient unapplied money is available, refunding warrants may be issued and the state will enter into a standby refunding warrant bid agreement with Morgan Guaranty Trust Co. and Bank of America NT&SA.
 The state's 1992-93 budget remains under legislative consideration. If it is passed promptly, the state will issue revenue anticipation notes for its operating cash needs and proceeds of the notes would be available to retire these warrants. If budget passage is delayed, the state will fund only its constitutionally mandated expenditures and issue registered warrants, a form of IOUs, for other obligations. Should this happen, the state expects that it will have available monies on hand to retire these warrants, as revenues will be collected over the period but expenditures will not be made. The major security provision is the commitment by the two banks, each liable severally for 50 percent, to bid on and purchase refunding warrants; bank conditions are not onerous. The rating of the warrants is based on the commitment of the banks, each of which is rated 'F-1+' by Fitch.
 California's financial operations have continued to deteriorate and in May, the official revenue estimate was lowered. The general fund is estimated to have a deficit of about $3.9 billion at June 30, 1992, and a cash shortage of $6.8 billion, as compared with $6.5 billion in internal borrowable resources. The magnitude of the financial problem through 1992-93 is in the range of $8-10 billion. The state's long-term general obligation ratings, as well as related ratings, will remain on FitchAlert until the financial plan is final and can be evaluated.
 -0- 6/18/92
 /CONTACT: Claire G. Cohen of Fitch, 212-908-0552/ CO: ST: California IN: SU: RTG


PS -- NY083 -- 1694 06/18/92 17:27 EDT
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Publication:PR Newswire
Date:Jun 18, 1992
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