S&P Global Ratings lowered its long-term rating two notches to'A+'from'AA'on Hayward , California's outstanding certificates of participation (COPs). The outlook is negative. The two-notch downgrade reflects our view of the city's deteriorating unrestricted general fund reserve and operating imbalance, while the negative outlook reflects the city's use of one-time inter-fund borrowing measures to close its budget gaps. The outstanding 2023 refunding COPs represent an interest in the lease payments made by the city. Pursuant to a lease agreement between Hayward (as lessee) and the Hayward Public Financing Authority (as lessor), the city has covenanted to budget and appropriate annual lease payments, subject to abatement, for use of certain assets that meet our criteria for seismic risk
