OREANDA-NEWS. Fitch Ratings has affirmed the short-term rating of 'F1'assigned to the State of California general obligation tax-exempt commercial paper notes, series A-8 and the State of California general obligation taxable commercial paper notes, series b-8 (the notes). The maximum aggregate amount of authorized notes which may be outstanding at any time has been increased to $125,000,000 from $75,000,000.

The rating action is in connection with (i) the increase in the size of the Bank of the West (BOTW, rated 'A/F1', Stable Outlook) letter of credit (LOC) which currently supports the notes to $125,000,000 from $75,000,000 and (ii) the extension of the stated expiration date to Feb.11,2020.

KEY RATING DRIVERS:
The 'F1' rating on the notes is affirmed based on the support of the BOTW LOC, which has a stated expiration date of Feb. 11. 2020 unless extended or earlier terminated. The BOTW LOC provides coverage for the principal amount of the notes and interest on the maturity dates of the notes.

U.S. Bank, N.A. continues as the Issuing and Paying Agent (IPA) for the notes, and as IPA, is directed to request an advance under the LOC whenever proceeds of the sale of rollover notes or long-term bonds or other available amounts in the Note Payment Account are insufficient to pay maturing notes. The LOC provides sufficient coverage for $125,000,000, the principal amount of notes and 90 days of interest calculated at 11% based on a 365-day year. The Issuing and Paying Agent Agreement specifies that notes must mature in no more than 90 days.

All notes will be issued at par, with interest due at maturity. Following the occurrence of an event of default under the reimbursement agreement, BOTW may direct the IPA to immediately stop the issuance of any additional notes. In such event, the BOTW LOC will expire after all the notes supported by LOC mature and have been paid from funds drawn on the LOC.

RATING SENSITIVITIES
The short-term 'F1'rating is exclusively tied to the short-term rating that Fitch maintains on the bank providing the LOC and will reflect all changes to that rating.