Oakland is the crime capital of California. It has fired over 100 cops and even the media has become targets of criminals. The city was over run, with the acceptance of the Mayor by terrorists calling themselves “The Occupier Gang”…millions in destruction of public and private property.
Oakland is a Third World City—lawless and in deep deficit.
Yet a bond company is willing to sell a pension obligation bond of $213 million to a city owned by the unions and run by the incompetent and corrupt. This is money that will not be fully repaid.
“The rating reflects gradual improvement to the city’s fiscal position and local economy as well as its high but manageable debt position and the security for the current sale. The POBs are secured by all legally available monies of the city including property tax override revenues.”
This makes no sense.
Would you buy a bond based on the value of property taxes of Oakland? Thought you should know.
Rating Action:
Moody’s assigns Aa3 rating to Oakland’s Pension Obligation Bonds Series 2012A
Global Credit Research, 6/19/12
Approximately $1.1 billion in debt affected including the current issue
New York, June 19, 2012 — Moody’s Rating
Issue: Taxable Pension Obligation Bonds, Series 2012A; Rating: Aa3; Sale Amount: $211,000,000; Expected Sale Date: 6/20/2012; Rating Description: General Obligation Limited Tax
Opinion
Moody’s Investors Service has assigned an Aa3 rating to the City of Oakland’s Pension Obligation Bonds Series 2012A. We have also affirmed the city’s outstanding long term ratings.
RATING RATIONALE
The rating reflects gradual improvement to the city’s fiscal position and local economy as well as its high but manageable debt position and the security for the current sale. The POBs are secured by all legally available monies of the city including property tax override revenues.
STRENGTHS
-Likely general fund surplus in fiscal 2012 with projected surplus in 2013
-Modest economic growth
-Settled labor contracts through at least 2013
CHALLENGES
-Still tenuous economic recovery
-Assessed value growth needed to generate projected tax override revenues
OUTLOOK
The stable outlook is derived from our expectation that the city will continue to experience gradual economic improvement and produce stable financial results.
WHAT COULD CHANGE THE RATING UP
-Material and sustained improvement to the city’s assessed valuation and socio-economic indicators
-Significant improvement to the city’s financial position
WHAT COULD CHANGE THE RATING DOWN
-Erosion of the city’s financial position
-Prolonged economic decline
The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.
Are You Kidding Me ???
November 17, 2012 at 10:49 am
Only a true sucker would buy California affiliated bonds.
July 6, 2012 at 10:27 am