Wall Street's Gates

Published: Friday, May 16, 2008 8:58 AM PDT

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There's one important detail in our story today on the city of San Diego's regaining of its credit rating that I wanted to highlight this morning. While the city no longer has a suspended credit rating and path has been cleared to go to Wall Street, it still hasn't actually tested Wall Street's waters.

Here's a key snippet from our story:

Analysts at Standard & Poor's and Fitch said the lifting of the rating suspension doesn't guarantee San Diego's immediate return to Wall Street. Whether or not they are welcomed back will depend entirely on the investors.

Amy Doppelt, a Fitch analyst, said some investors might be ready to snap up the city's bonds, but others might want to wait until the city puts out its 2007 audited financial statement, which Goldstone expects to be out in July or August.

"The only real true test would be when they're ready to go the market," she said.

(San Diego's Chief Operating Officer Jay) Goldstone said he has had conversations about whether people would buy San Diego bonds with some of the big mutual funds like Vanguard and Fidelity. "I've talked to some who say they would need to see the city's 2007 financial reports before making a decision, and others have said 'No problem,'" Goldstone said.

Yesterday's announcement lifted the roadblock to getting to Wall Street, one that the city had been desperately seeking to overcome for nearly four years.

Now, the city has to see what investors say when they actually show up on Wall Street with a bond offering. If they want to see the city's 2007 audited financial statements, then the city will need to produce those.

Goldstone is confident that by the time the city's ready to go it will have those financial statements ready, saying he expects them to be done by July or August. The city obviously had problems getting those done in a timely fashion in the past, but it seems like the long-awaited release of the 2003 financial statements last year has so far cleared the way for further statements to come out with minimal troubles.