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SAN FRANCISCO, April 14 (Reuters) - Standard & Poor's Ratings Services on Tuesday assigned its A long-term rating to $5 billion of California's federally-taxable general obligation bonds, which it expects to include $3.5 billion in Build America Bonds.

Authorized under the American Recovery and Reinvestment Act, Build America Bonds let issuers sell taxable bonds that either offer buyers a tax credit or allow issuers to receive a direct payment from the U.S. government equivalent to 35 percent of the interest costs on the bonds.

Issuers large and small plan to begin issuing the new type of debt, which aims to help raise funds for rebuilding infrastructure amid stressed municipal bond markets.

California is planning to sell $3 billion to $4 billion in taxable general obligation debt next week in a transaction that will include Build America Bonds, also known as BABs, said Tom Dresslar, a spokesman for California State Treasurer Bill Lockyer.

"Some of that will be BABs, but it's an undetermined amount," said Dresslar.

S&P credit analyst Gabriel Petek said he stood by his estimate of the overall size of the planned issue and his estimate of how much of it will be in the form of Build America Bonds.

"It's somewhere in this ballpark," Petek told Reuters by telephone.

At the same time, S&P affirmed its A long-term rating on the state's $62.66 billion of existing general obligation debt.

California's Build America Bonds are backed by the state's full faith and credit pledge of its general fund, but Petek said in a statement the state's finances are under heavy pressure as revenues weaken amid a sharp downturn in the local economy. (Reporting by Jim Christie)