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LOS ANGELES STATE BUILDING AUTHORITY BONDS RATED 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, May 6 /PRNewswire/ -- The Los Angeles State Building Authority's $100 million (approx.) Lease Revenue Bonds (State of California Department of General Services Lease) 1993 Series A are rated `A+' by Fitch. The authority's `A+' 1988 Series A bonds are affirmed. The bonds will be sold through negotiation on or about May 13 by a syndicate led by Lazard Freres. The credit trend is uncertain.
 The rating is based on the project's essentiality, the financing's legal structure, and the state's overall credit quality. The project, an office building housing various state departments and agencies, is complete and occupied, and generates long-term savings by replacing more costly privately rented space. California's long-term credit prospects have weakened, as the recession continues to be deeper than expected and financial operations continue to deteriorate. The uncertain trend reflects the economy's unclear course, as well as the state's as yet unproven ability to shape financial expectations to prevailing conditions.
 Bond proceeds will be used to refund a portion of the authority's 1988 Series A bonds. The original issue financed construction of the Ronald Reagan State Office Building in downtown Los Angeles, which opened in the summer of 1990. The building is occupied by seven state departments or agencies, including offices of the governor and state Supreme Court. Legal features are strong, including the state's Department of General Services' covenant to take all actions necessary to include the lease payment in its annual budget. The refunding is expected to yield at least $2.9 million in present value savings, 3.3 percent of the refunding issue size.
 California's financial position continues to deteriorate, and the fiscal 1993 budget is now out of balance. The proposed fiscal 1994 budget carries the 1992 level deficit forward and attempts to reach balances by June 30, 1994 through deep expenditure cuts and other measures. However, the legislature's failure to end the renter's tax credit and to enact certain saving measures will add $475 million to this year's deficit and increase next year's gap by the same amount. For nine months of fiscal 1993, revenues approximate the January estimate. The budget remains under consideration.
 While California's long-term economic resources and prospects are considerable, the state's economy remains depressed. Employment declined significantly in 1991 from the 1990 peak; data through January 1993 show further decline. The unemployment rate in March was 9.4 percent compared to 7.0 percent for the U.S. Preliminary information regarding military base closings indicate a net job loss (direct) in the state of some 31,700 jobs, less than one-half of 1 percent of employment. Also, personal income growth has slowed dramatically.
 -0- 5/6/93
 /CONTACT: Amy S. Doppelt, 212-908-0514, or Claire G. Cohen, 212-908-0552, for Fitch/


CO: Los Angeles State Building Authority ST: California IN: SU: RTG

SM -- NY084 -- 5495 05/06/93 13:13 EDT
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Date:May 6, 1993
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