All three major credit agencies are giving California the nation's lowest bond rating.
That could lower demand and drive up taxpayers' costs as state Treasurer Bill Lockyer prepares to sell $4 billion in general-obligation bonds to help pay for hundreds of stalled construction projects.
Moody's Investors Service downgraded the state's general-obligation bonds to A2 from A1 on Friday. The move follows similar decisions by Standard & Poor's and Fitch Ratings.
California previously was tied with Louisiana for the nation's worst credit rating.
The lower rating likely means higher interest payments on the bonds. But Lockyer spokesman Tom Dresslar says the bonds are still safe for investors, noting the state has not defaulted on past bond payments.
Copyright AP - Associated Press
