Golden State Rules

This is good news for both California and the bond market in general.

California sold $5 billion in short-term municipal notes Thursday in a deal that helps the state meet its cash flow needs and one that was upsized twice in the past 24 hours due to strong investor demand.

California split the offering into two tranches, with $1.2 billion maturing on May 20, 2009, and yielding 3.75%, and $3.8 billion maturing on June 22, 2009, and yielding 4.25%.

“The success of this deal far surpassed all expectations,” said Bill Lockyer, California’s state treasurer, in a statement.

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0 Responses to Golden State Rules

  1. Dan says:

    Good news in the short term. But this also indicates that there is still in fact a lot of capital seeking investment, it’s just capital that for the moment is badly spooked by getting its fingers banged in the car door.

    I hope that a surplus of capital doesn’t start the whole tidal wave rolling again once the foolish children known as Really Smart Big-Time Investors forget about their throbbing fingers.

  2. Adam says:

    That still seems a fairly high interest rate compared to 1.5% from the Fed

  3. Jon Taplin says:

    Adam- Everything is high compared to the Fed.

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