Fitch analysts have taken a look at California's budget situation and decided that now would be a good time to downgrade the state's debt rating:
Moody's and Standard and Poor's have also threatened to downgrade their ratings.
The downgrade to 'BBB' is based on the state's continued inability to achieve timely agreement on budgetary and cash flow solutions to its severe fiscal crisis. Since no agreement was reached by the June 30, 2009 fiscal year (FY) end, the state's controller has now begun issuing registered warrants (IOUs) for certain non-priority payments to preserve cash, and the budget gap to be addressed has increased to $26.3 billion from $24.3 billion.For comparison's sake, California's rating is lower than the ratings for Libya and Mexico, but higher than those for Kazakhstan, Peru and Namibia. So look on the bright side.
Moody's and Standard and Poor's have also threatened to downgrade their ratings.
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