LOS ANGELES: Fitch Ratings upgraded its rating on California's general obligation (GO) bonds to "A+" from "A" with a stable outlook on Wednesday night, citing "continued improvement in the state's fundamental fiscal position".
Fitch said it upgraded the rating on $76.4 billion in outstanding GO bonds.
The agency also assigned an "A+" rating to $790 million various purpose GO bonds and $1.11 billion various purpose GO refunding bonds that are due to be sold on March 5.
"Institutionalized changes to fiscal operations in recent years, when combined with the ongoing economic and revenue recovery, have enabled the state to materially improve its financial position, enhancing its ability to address future fiscal challenges," Fitch said.
California State Treasurer John Chiang said the upgrade "is both a validation of California's recently displayed fiscal discipline, as well as a stern warning against returning to business-as-usual".
Chiang said that California's creditworthiness still trails that of 47 other U.S. states. "Fitch's credit analysis emphasizes the need for continued spending restraint and more tough decision-making aimed at making future economic downturns, which are inevitable, more manageable," he said.
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