Buyers scramble for California bonds
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Robust investor demand allowed California on Thursday to increase the size of a bond offering to $2.5 billion from $2 billion.
The tax-free general-obligation bonds, which will fund voter-approved infrastructure projects, attracted orders totaling $1.38 billion from individual investors Tuesday and Wednesday.
With just $620 million of the original $2-billion deal left, the state took in $3.3 billion in orders from institutional investors Thursday. To fill more of those orders, Treasurer Bill Lockyer raised the deal to $2.5 billion.
Despite its weak credit rating and the ongoing struggle to plug a $20-billion budget gap, California benefited from investors’ still-voracious hunger for fixed-income securities. The state sold bonds ranging in maturity from one year to 30 years.
Strong demand allowed the state to slightly reduce yields on some of the bonds from preliminary estimates. Final tax-free yields ranged from 1.17% on the two-year bond to 5.65% on the 30-year.
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