Fitch Ratings announced that it removed California general obligation debt from “rating watch negative” and reaffirmed its BBB rating with a “stable outlook.”
Fitch explained that the sale of $11 billion in deficit reduction bonds along with the recent adoption of a 2005 budget has restored the state’s liquidity.
Standard & Poor’s and Moody’s, the two major municipal bond rating services, have also recognized California’s improving financial condition.
S&P also rates California BBB, but with a “positive outlook,” while Moody’s assigned the state an A3 rating, also citing a “positive outlook.”
In May, Moody’s raised its rating from Baa1 and S&P elevated California general obligation bonds to “credit watch positive” in March.