30 California cities are sinking in debt

Cities are over the People's Republic are under review for a downgrade in their credit rating



The debt of 30 California cities, including Oakland, Fresno and Sacramento, has been placed under review for downgrades because of economic pressures in the state, Moody’s Investors Service said.

The examinations may affect $14.3 billion in lease-backed and general-obligation debt issued by the municipalities, the New York-based company said in Bloomberg News.

“California cities operate under more rigid revenue-raising constraints than cities in many other parts of the country,” Eric Hoffmann, who heads Moody’s California local government ratings team, said in a statement.

“Combined with steeply rising costs, these constraints mean that these cities will likely recover more slowly than their peers nationally, even if the state’s economic recovery tracks the nation’s.”

Moody’s said it identified the credits as part of a broader review started in August of 95 rated cities in California.

The general-obligation bond ratings of Los Angeles, now Aa3, fourth-highest, and San Francisco, Aa2, third-highest, are on review for upgrades, Moody’s said.


Cities with debt under review for credit downgrades include:

• Azusa
• Berkeley
• Colma
• Danville
• Downey
• Fresno
• Glendale
• Huntington Beach
• Inglewood
• Long Beach
• Los Gatos
• Martinez
• Monterey
• Oakland
• Oceanside
• Palmdale
• Petaluma
• Rancho Mirage
• Redondo Beach
• Sacramento
• San Leandro
• Santa Ana
• Santa Barbara
• Santa Clara
• Santa Maria
• Santa Monica
• Santa Rosa
• Sunnyvale
• Torrance
• Woodland

In addition, the pension-obligation bonds of several issuers were downgraded, Moody’s said, including Downey, Fresno, Oakland, Oceanside, San Leandro and Santa Rosa.
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(Bloomberg News)


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