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NEWSLETTER ISSUES 'DEFAULT ALERT' FOR FIVE CALIFORNIA BOND ISSUES

 PALM SPRINGS, Calif., June 2 /PRNewswire/ -- A "Default Alert" for five California municipal bond issues totaling $80 million was issued in the June edition of the California Municipal Bond Advisor, a newsletter based in Palm Springs.
 The five bond issues are included in the "Bond Advisor Watchlist," a special section reporting California bonds experiencing various degrees of financial difficulty. As of June, this list included 41 bond issues totaling more than $740 million.
 The five bond issues face possible default in 1993 if back taxes are not paid or proceeds from a foreclosure sale are not realized soon.
 This is not to say these issues will default, as circumstances -- including a bail-out engineered by the issuer -- could arise that would avert a default. However these five bond issues are threatened because of significant drawdowns or depletion of bond debt service reserves, or other factors, that leave them at this time without sufficient cash to make the next debt service payment in full. Default here is defined as an interruption of full interest and/or principal payments to bondholders.
 The five are:
 -- $7.5 million City of Ione Special Tax Bonds Community
 Facilities District 1989-2.
 -- $5.2 million City of Ione Special Tax Bonds Community
 Facilities District 1989-1.
 -- $14 million Oxnard Town Center Community Facilities District
 No. 88-1.
 -- $29.7 million Central San Joaquin Financing Authority 1990
 Public Capital Improvement Revenue Bonds.
 -- $24 million First San Diego River Improvement Project Special
 Assessment 1915 Act Bonds.
 The majority of the 43 bond issues on the "Watchlist" are unrated Mello Roos Bonds or 1915 Act Special Assessment Bonds that were issued in recent years to finance infrastructure for real estate development. The severe real estate recession has affected the property owners' ability or willingness to pay special taxes or special assessments for repayment of the bonds due in two installments -- Dec. 10 and April 10. For the most part, owners of the property securing the bonds are real estate developers. In most cases, issuers have begun foreclosure proceedings against the delinquent taxpayers. The value of the foreclosed property ultimately represents the security for the bondholders.
 The Bond Advisor Watchlist includes:
 -- 19 Mello Roos bond issues, totaling $337 million. This represents approximately 8.5 percent of all Mello Roos bonds in California. Three issues, totaling $26.7 million, face possible default in 1993. The rest have bond reserves and other funds sufficient to carry them through the year.
 -- One Marks Roos bond issue for $29.7 million.
 -- 13 Special Assessment 1915 Act Bond issues, totaling $277 million. Of those, one issue for $24 million could default in 1993.
 -- Five home mortgage bond issues for $35 million. Falling interest rates have proven to be a problem for some of mortgage- related bond issues because of shrinking loan portfolios and other structural problems. The result: declining asset-to-liability ratios.
 -- Three hospital bond issues. Issues on the list have been downgraded because of recent weak financial results.
 -- (One bond issue has defaulted thus far in 1993: $16.5 million Simi Valley Multifamily Housing Revenue Bonds, 1985 Issue C (Rancho Corrales Apartments). The issue is related to problems associated with Mutual Benefit Life Insurance.)
 The list is based on information obtained from various sources believed to be reliable, but accuracy cannot be guaranteed. The list does not purport to include every bond issue in the state experiencing financial difficulty, but represents a best effort to compile a record from data that is not readily made available in a complete form. Municipalities are not required to disclose to investors updated and audited financial results.
 -0- 6/2/93
 /EDITOR'S NOTE: Graphic available upon request./
 /CONTACT: Gavin Murphy or Zane B. Mann of California Municipal Bond Advisor, 619-320-7997/


CO: California Municipal Bond Advisor ST: California IN: FIN PUB SU:

JB-JL -- LA004 -- 4449 06/02/93 12:04 EDT
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Date:Jun 2, 1993
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