Moody's cuts CA bond rating

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Moody's cuts California bond rating By CBS.MarketWatch.com Last Update: 1:17 PM ET May 15, 2001 NEW YORK (CBS.MW) -- Moody's Investors Service cut ratings Tuesday on California's $19.8 billion of general obligation bonds and $5.7 billion of lease revenue bonds and said the state's credit outlook remains negative. The move reflects increasing financial risks stemming from the state's energy crisis as well as broader concerns about economic conditions in California and the U.S. as a whole, the debt-rating agency said. See full story. And: Outages likely to be worse than state forecast

California is in for at least five times the rolling blackouts that had been predicted by the state, an electric industry group said Tuesday. The state faces at least 260 hours of rolling blackouts in which an average 2,160 megawatts of power will be cut during the high-demand summer months. That forecast comes from the North American Electric Reliability Council, a non-profit consortium created to promote reliable power supplies. See full story.

-- Guy Daley (guydaley1@netzero.net), May 15, 2001

Answers

Remember how widely NERC was ridiculed before y2k? Well, they DO stay on top of things when it comes to electricity.

Their five times prediction is about what I figured.

Heavens to Betsy. I LIVE in this sorry State. I think its time to rent a log cabin high in the mountains for the summer.

-- JackW (jpayne@webtv.net), May 15, 2001.


It's time to move out, if you can get a job offer first. And, don't just go to another Western state, but at least as far East as TX-OK- KS-NE-SD-ND.

Full Story Hyperlink: http://cbs.marketwatch.com/news/story.asp?print=1&guid={58F56D8C-1B56- 47B8-88C6-C26251A2E66C}&siteid=mktw

Moody's cuts Calif. bond ratings

Energy crisis affects general obligation, revenue issues

By Lisa Sanders, CBS.MarketWatch.com

Last Update: 12:07 PM ET May 15, 2001 NEW YORK (CBS.MW) -- Moody's Investors Service cut ratings Tuesday on California's $19.8 billion of general obligation bonds and $5.7 billion of lease revenue bonds and said the state's credit outlook remains negative.

The move reflects increasing financial risks stemming from the state's energy crisis as well as broader concerns about economic conditions in California and the U.S. as a whole, the debt-rating agency said. Moody's downgraded the rating on California's general obligation bonds to Aa3 from Aa2, and on its lease revenue bonds to A1 from Aa3.

"The recent setback in securing legislation to provide energy bridge financing threatens to compound the risks and costs of the energy crisis," Moody's stated in its report. Moody's noted that California has fronted $4 billion in cash for power purchases to date, a figure it said is almost certain to rise as summer approaches.

While noting that the state legislature passed a bill last week authorizing the issuance of $13.4 billion worth of power revenue bonds to repay the general fund and pay for future energy purchases, Moody's said any law isn't likely to take effect until late summer.

Such a delay won't allow the state to secure bridge financing to pay for power in the interim, it said.

"The bridge financing would have begun the process of shifting the source of cash from the state treasury to the credit markets, and ultimately to ratepayers," Moody's said.

The state intends to repay the bonds with revenue from rates charged to consumers.

Lisa Sanders is a Dallas-based reporter for CBS.MarketWatch.com. © Copyright MarketWatch.com, Inc. All rights reserved. Fair Use for Education and Research Purposes Only

-- Robert Riggs (rxr999@yahoo.com), May 15, 2001.


Tuesday May 15 3:34 PM ET

Moody's Downgrades Calif. Rating

SACRAMENTO, Calif. (AP) - California's credit rating was downgraded by a major Wall Street agency Tuesday because of the power crisis' increasing drain on the state's finances.

Moody's Investors Service lowered its rating on $19.8 billion of state general obligation bonds from Aa3 to Aa2, and dropped the rating on $5.7 billion in lease revenue bonds from Aa3 to A1.

The action put California among the 12 lowest states in Moody's ratings.

California has committed itself to spend billions buying electricity on behalf of its two biggest utilities, which have run up big losses from buying wholesale power and have all but exhausted their own credit.

Standard & Poors, another major rating agency, downgraded the state's credit rating in April, placing the state in the nation's bottom three, equal to Hawaii and slightly better than Louisiana.

A lower credit rating makes it more expensive for the state to borrow money.

California's rating was last downgraded in 1994, when the state was emerging from a long recession and recovering from a $14 billion deficit. It took the state more than five years to recover a high- quality rating.

Copyright, Associated Press, Fair Use For Education and Research Only

Hyperlink: http://dailynews.yahoo.com/htx/ap/20010515/bs/california_credit_1.html

-- Robert Riggs (rxr.999@worldnet.att.net), May 15, 2001.


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