There's not much golden about California these days -- least of all its bonds.
Fitch Ratings downgraded the state's long-term general obligation bond rating to BBB from A- on Monday, the second cut on the reading since June. The bonds remain on rating watch negative.
Fitch attributed the downgrade to California's continued inability to achieve timely agreement on budget- and cash flow-solutions amid its severe fiscal crisis. An agreement was suppose to be reached by the end of the state's fiscal year on June 30.
The state has been unable to close its $26.3 billion deficit and plans to resort to issuing more than $3 billion in IOUs to thousands of creditors. The use of IOUs for non-priority payments would offset cash shortfalls into September 2009.
The BBB rating is two notches above junk.
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