Los Angeles, CA's 2019-A Lease Revenue Bonds And 2019-B Lease Revenue Refunding Bonds Assigned 'AA-' Rating

SAN FRANCISCO (S&P Global Ratings) May 24, 2019--S&P Global Ratings assigned its 'AA-' rating to the City of Los Angeles Municipal Improvement Corp., Calif.'s 2019-A lease revenue bonds (capital equipment) and 2019-B lease revenue refunding bonds (real property) issued on behalf of the City of Los Angeles. At the same time, S&P Global Ratings affirmed its 'AA' long-term rating on the city's outstanding general obligation (GO) and judgment obligation bonds and its 'AA-' long-term rating and underlying rating (SPUR) on the city's lease revenue bonds. The outlook on all ratings is stable.
"The ratings reflect our view of the city's strong economy and management, combined with adequate budgetary performance and very strong liquidity," said S&P Global Ratings credit analyst Jen Hansen.
Consistent with our criteria for appropriation obligations, the rating on the appropriation debt is one notch below our view of the entity's general creditworthiness.
The stable outlook reflects our expectation that we will not change the ratings over the two-year outlook horizon. We expect the city to maintain budgetary balance with available reserves that are commensurate with those of peers. Finally, the stable outlook assumes stable city staffing levels and continued prudent pension funding practices.
If the city were to maintain continued budgetary balance and strong reserves and eliminate the ongoing contingent liability risks and deferred maintenance needs, we could raise the ratings.
If the city is unable to maintain budgetary balance (or reserves decline materially) due to the increased pension contributions, renegotiated labor contracts, evolving federal policies, or other, unforeseen reasons, we could lower the ratings.
The 2019-A lease revenue bonds will be used to retire certain outstanding maturities of commercial paper (CP) issued by the Los Angeles Municipal Improvement Corp., the proceeds of which were used to finance and refinance the acquisition of certain items of capital equipment of the city. The 2019-B lease revenue refunding bonds will be used to retire certain outstanding maturities of CP issued by the corporation, the proceeds of which were used to finance and refinance the acquisition and improvement of real property of the city and refund all of the corporation's lease revenue bonds, series 2009-D (recovery zone economic development bonds).
We work across the world

From London to San Francisco, to our home base in (Saint Helier) Jersey, we’re looking for extraordinary and creative scientists to help us drive the field forward.

Disclaimers: AC Investment Inc. currently does not act as an equities executing broker or route orders containing equities securities. All data and information is provided “as is” for personal informational purposes only, and is not intended for trading purposes or advice. Please consult your broker or financial representative to verify pricing before executing any trade.

77 Massachusetts Avenue Cambridge, MA 02139 617-253-1000 pr@ademcetinkaya.com