Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Businessweek Archives

California's Ratings Downgrade Sparks Municipality Madness

Think of it as a muni Mardi Gras: California’s debt is now rated lower than Louisiana.

Thanks to a budget crisis, Standard & Poor’s (which like BusinessWeek, is owned by McGraw-Hill) cut California’s credit rating to A from A+ on Feb. 2. As a result, California is now the largest tax-exempt borrower in the lowest-rated state, behind Louisiana.

What does that mean for municipal bond investors? The implications aren’t dire, according to Tom Petruno in the Los Angeles Times.

“…Debt ratings are relative. Being at the bottom with an “A” grade doesn’t mean that S&P believes California is in danger of reneging on its debts. In fact, the state Constitution mandates that the state must repay its bondholders…But if there’s really no default risk, why should California be rated much differently than, say, Georgia, which has a grade of “AAA” from S&P?

Good question, Tom. Readers, what do you think?

blog comments powered by Disqus