TITLE

Buyers Still Holding California GOs, Despite Ratings Slide

AUTHOR(S)
Fine, Jacob
PUB. DATE
April 2003
SOURCE
Bond Buyer;4/11/2003, Vol. 344 Issue 31613, p7
SOURCE TYPE
Trade Publication
DOC. TYPE
Article
ABSTRACT
A California budget deficit projected to be as high as 35 billion dollars has not troubled residents who own the state's general obligation bonds. Moody's Investors Service downgraded the state's GO rating to A2 from A1 in February 2003, following the lead of Standard & Poor's and Fitch Ratings, which lowered the credit in December 2002 to A from A-plus, and AA, respectively. Yet, like other market participants, Warren Gordon, director of municipal trading at Charles Schwab & Corp. in San Francisco, said that despite the state's financial difficulties, he has not seen a lot of investors selling California GOs. In February 2003, California muni funds had a net inflow of 17.3 million dollars, according to Boston-based Financial Research Corp. While that was smaller than that of national funds, which took in a net 528.3 million dollars in February 2003, California funds also had smaller outflows in January 2003, 236.5 million dollars, compared to 341.1 million dollars from national funds. Rygel in Los Angeles, does not believe the state will default, she said that her firm is not buying California GO bonds for its California municipal bond mutual fund or managed accounts during the current legislative session.
ACCESSION #
9611079

 

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