WASHINGTON -- California's struggle to pay its lease revenue bonds on time during its budget impasse illustrated an inherent risk with lease securities that the rating agencies say is prompting them to take a new look at the way they rate such securities.

The two-month-long standoff forced many lease investors to focus for the first time on the risk that a state might not appropriate lease payments -- not because it did not want to, but because it was not legally authorized to do so -- noted Sally Rutherford, a Standard & Poor's Corp. senior vice president, in a Creditweek Municipal article yesterday.

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