California Wildfires Could Hurt Local Government Credit This Time

Source: S&P Global Ratings, November 13, 2018
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Key Takeaways:

– We have identified 26 California local governments with $3.5 billion in debt potentially affected by the fires.
– We have placed debt ratings associated with two local governments on CreditWatch with negative implications, and may take negative rating action on other obligors as early as this week if new evidence suggests damage potentially affecting credit quality.
– We continue to view California’s buoyant economy, including a strong real estate market, as, on balance, supporting credit resiliency for most local governments because we believe that private and public resources will likely be ready to support the rebuilding process.