Los Angeles County in Smallest Short-Term Issue Since ’08

Los Angeles County is poised to borrow $900 million in its smallest sale of short-term notes since 2008, signaling the financial recovery of the nation’s most-populous county.

The lowest previous issue of tax- and revenue-anticipation notes, or TRANS, was for $500 million in the last full year of George W. Bush’s presidency. Standard & Poor’s rates the county’s debt SP-1+ for short-term debt and AA+, second-highest, for long-term debt.

“The par amount of our TRANS is a direct reflection of our cash-flow needs,” Doug Baron, the county treasurer’s director of public finance, said by telephone. “Because our budget has stabilized and property-tax receipts are growing, our short-term cash flow needs have decreased.”

With 10 million people, more than the populations of all but seven states, Los Angeles County has rebounded from declines in property and sales taxes that began in 2008, according to budget documents. Most of the county’s $26 billion in spending goes toward health care, sheriff’s protection and jails, and public assistance.

The county has had two years without budget shortfalls after five consecutive years of deficits totaling $1.2 billion, the documents show.

“The county continues to emerge from an extremely difficult economic period and we are proud to have a fully balanced budget,” Chief Executive Officer William Fujioka said last month in a statement.

The bonds will be offered as soon as next week and are to be repaid using proceeds from property taxes and other general revenue.

“It’s a sign that maybe things are a little better for them,” Jeffrey Fishman, founder and president of JSF Financial LLC, which manages about $650 million, said in an interview at Bloomberg headquarters in New York. About a third of the Los Angeles-based firm’s holdings are in munis, he said.

Bonds from California issuers gained 6.6 percent this year through yesterday, compared with 5.9 percent for the broader $3.7 trillion municipal market, according to S&P Dow Jones Indices.

To contact the reporters on this story: James Nash in Los Angeles at jnash24@bloomberg.net; Elizabeth Campbell in New York at ecampbell14@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Pete Young, Sylvia Wier

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