OREANDA-NEWS. Fitch Ratings assigns a rating of 'AAApre' to the $930,050,000 State of California (State) various purpose general obligation bonds (the refunded bonds) as follows:

--Dated Dec. 1, 2005 and maturing March 1, 2035;
--Dated June 1, 2006 and maturing Sept. 1, 2027, Sept. 1, 2028, Sept. 1, 2030, Sept. 1, 2031, Sept. 1, 2032, Sept. 1, 2033 (partial refunding) and Sept. 1, 2035 (partial refunding);
--Dated Sept. 1, 2006 and maturing Sept. 1, 2023, Sept. 1, 2031 and Sept. 1, 2032;
--Dated Nov. 1, 2006 and maturing Oct. 1, 2017 to Oct. 1, 2020, Oct. 1, 2023, Oct. 1, 2026, Oct. 1, 2028, Oct. 1, 2031 (partial refunding) and Oct. 1, 2036 (partial refunding);
--Dated Feb. 1, 2007 and maturing Dec. 1, 2017 to Dec. 1, 2022, Dec. 1, 2024 to Dec. 1, 2026, Dec. 1, 2029 and Dec. 1, 2032 (partial refunding).

The Rating Outlook is Stable.

KEY RATING DRIVERS
The 'AAApre', Stable Outlook rating is based on the pledge of securities in the irrevocable escrow fund securing the bonds and reflects the lien of the refunded bondholders on the escrow trust funds and that all amounts have been invested in State and Local Government Securities (SLGS), which are direct non-callable obligations of the United States. The U.S. full faith and credit is currently rated 'AAA', Stable Outlook by Fitch.

Fitch also maintains an unenhanced rating of 'A+', Stable Outlook on the bonds based on the general obligation (GO) pledge of the State's full faith and credit (rated 'A+', Stable Outlook by Fitch). The bonds remain a general obligation of the State even though the source of repayment is expected to be the securities in the escrow deposit fund, further described below. For more information on the State of California GO rating, see press release 'Fitch Rates California $960MM GOs 'A+'; Outlook Stable' dated Oct. 5, 2015 available at 'www.fitchratings.com'.

The bonds were refunded on Nov. 3, 2015 with proceeds of the State's tax-exempt various purpose GO refunding bonds. The ratings apply to the refunded bonds listed by CUSIP numbers, below. The refunded bonds dated Dec. 1, 2005 will be redeemed on March 1, 2016; the refunded bonds dated June 1, 2006 and Sept. 1, 2006 will be redeemed on Sept. 1, 2016; the refunded bonds dated Nov. 1, 2006 will be redeemed on Oct. 1, 2016, and the refunded bonds dated Feb. 1, 2007 will be redeemed on Dec. 1, 2016, all at par plus accrued interest.

Pursuant to an irrevocable escrow certificate, the State Treasurer, as escrow agent, holds a separate special irrevocable escrow fund, established by the State Controller within the State's Treasury, in trust for the benefit of the refunded bondholders. All cash and securities held in this fund are pledged irrevocably to the payment when due of interest on the refunded bonds and the payment of principal upon redemption. In the future, any substitute or additional investments are limited to non-callable obligations of the United States.

Grant Thornton verified the mathematical accuracy of computations relating to the adequacy of income from escrowed funds to pay debt service requirements of the refunded bonds. These computations were contained in schedules provided to them by Public Resources Advisory Group, financial advisor for the refunded bonds transaction. According to the Grant Thornton verification report, the anticipated receipts from the securities and cash deposited will produce amounts necessary to provide for the timely payment of principal and interest when due at maturity or earlier redemption. Prior to accepting substitute investment securities or disbursing funds to the State, the escrow agent must receive a new report verifying the continued sufficiency of escrowed funds to meet all future payments of principal and interest on the refunded bonds.

RATING SENSITIVITIES
The rating is exclusively tied to the U.S. sovereign creditworthiness and will reflect all changes to that rating.

The 'AAApre', Stable Outlook rating applies to the bonds with the following CUSIP numbers:

13063CTR1
13063CWB2
13063CWC0
13063CWD8
13062TEM2
13062TEN0
13063CYR5
13063CYS3
13062TPH1
13062TPR9
13062TPS7
13062TRS5
13062TRT3
13062TRU0
13062TRV8
13062TRX4
13062TRY2
13062TRZ9
13063CYV6
13063CYW4
13062TYK4
13062TYL2
13062TYM0
13062TYN8
13062TYP3
13062TYQ1
13062TYS7
13062TYT5
13062TYU2
13062TYX6
13063CYZ7