On Wednesday, S&P announced that it has gone ahead and downgraded California's credit rating to A-minus, as the state came face-to-face with yet another multi-billion dollar gap in the budget for the ongoing financial year, and has sent out an appeal to federal lawmakers for help.

The cost of purchasing insurance against the risk California's Government would default on its current debt hiked after the downgrade, but only slightly, hinting that many investors were already aware that state is not in good financial health.

S&P continued to stand by its negative outlook on California's $63.9 Billion in general obligation debt, which could lead to even more pull backs in the rating.

Previously, the state was rated A, which is already the lowest across the county. The last downgrade was given to California by S&P last February.

"Relative to the past fiscal year, uncertain assumptions for major portions of the budget balancing proposal make the state's credit more susceptible to adverse economic or other development", S&P analysts noted.

The A-minus level for California is four notches above the "junk" status.