I read:

"Public finance doesn’t work the same way as corporate finance does. Just because California has a lot of debt and runs budget deficits, doesn’t necessarily mean that the state is going bankrupt. As long as investors are coming into the state and invest, and taxes are being collected by the government then you cannot claim that the state is bankrupt."

Note that, despite constant fear-mongering about the national debt, US treasury bonds also enjoy the highest rating.

BTW, "Insoluble" means something that can't be dissolved. I think the word you're looking for is "insolvent," which can't apply to California or it, too, would not have a high bond rating.