California Municipal Bond Sale for revenue Anticipation Notes price on Thursday at a yield of 1.75% up from an originally anticipated 1.25%. California sold $7.75 billion worth of notes maturing on June 28, 2011. Retail investors bought 60% of these notes. We decided to participate because this was a short-term issue yielding far more than any money market or CD bank account. Hopefully state of California won’t go bankrupt in the next seven months!
California is selling more Build America Bonds than originally anticipated today, approximately $3 billion worth. These bonds can be sold to a much wider audience including foreign investors, so it comes as no surprise that they decreased the amount of tax exempt bonds and increased the amount of Build America Bonds offered.
California has $110 billion in both authorized and unissued and outstanding general obligation bonds. It pays just under 7% of its general fund revenue to bond debt. This may rise and impact schools, health care, or other needs. Pensions are the single largest debt for the state at $6.5 billion a year, more that California is spending on education.