California state bonds sell briskly
Demand for California general obligation bonds was strong during a just-finished three-day sale, state Treasurer Bill Lockyer reported.
The state sold $930.7 million in bonds, ranging in maturities from five to 26 years, to retail customers Tuesday and Wednesday. That represented 47% of the $1.98-billion offering.
The remaining bonds were sold to institutional investors Thursday.
“We were hoping for strong demand, and we weren’t disappointed,” Lockyer said.
The bonds are being sold to refinance existing debt and proceeds are not being used to pay for new infrastructure, the treasurer’s office said.
The refinancing should save an estimated $250 million in debt-service payments.
At the sales’ end, yields were between 1.28% and 4.13%.
Although California is among the states with the lowest bond ratings, Standard & Poor’s two weeks ago raised its outlook on California’s debt-paying ability to “positive” from “stable.”
The state’s improving financial picture comes as some of its cities are facing financial crunches. Stockton in San Joaquin County is on the verge of declaring bankruptcy. In 2008, Vallejo in Solano County was the first California city in recent years to seek bankruptcy protection from creditors.
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