Deficit Brings Another Cut in State Bond Rating
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California’s bond rating was cut for the second time in two days, with New York-based Fitch Ratings lowering its assessment three levels because of a projected $34.8-billion budget deficit in the next two fiscal years.
Fitch cited the growing deficit Friday as the trigger for cutting its rating on $23.5 billion in general obligation bonds to A from AA. On Thursday, Standard & Poor’s cut it to A from A+. Fitch issued an alert 20 months ago that the rating might be lowered because of state power purchases during the energy crisis.
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