SAN FRANCISCO, July 24 (Reuters) - Moody’s Investors Service affirmed its A1 rating on California’s general obligation bonds on Tuesday despite further financial challenges for the most populous U.S. state due to a weak economic recovery.
California’s “long-term economic prospects are good, and long-term liabilities (debt, unfunded pension liabilities, and repayment of other obligations captured in negative audited balances) are moderate compared to many other states,” Moody’s said in a statement.
“The outlook on the State of California is stable at this time, based on the expectation that the state will deal with any further challenges to its budgetary balance and liquidity without another major cash crisis,” Moody’s added.
The rating agency’s comments come as California prepares to sell revenue anticipation notes for its short-term borrowing needs. The amount of the sale, tentatively set for August, has yet to be determined.
The state’s department of finance last week said California’s general fund cash for June was $622 million above forecast in the state budget while revenue for the fiscal year ended in June was $540 million above projections. (Reporting by Jim Christie; Editing by Eric Walsh and Jackie Frank)