What credit crunch? Californians are falling over themselves to extend credit to the Golden State, which is floating an offering of short-term IOUs this week.
But robust demand for the tax-free debt will mean lower yields than investors might have hoped.
Treasurer Bill Lockyer on Wednesday boosted the size of the state's offering of so-called revenue anticipation notes to $4.5 billion from $4 billion, amid a huge wave of orders from individual investors.
Those orders totaled $3.9 billion by Wednesday afternoon, or about 98% of the original $4 billion in securities to be sold.
"We're obviously ecstatic about the response," said Tom Dresslar, a spokesman for Lockyer.
"Given the continued free fall of the stock market, folks are looking for a safe place to put their money and earn a good rate of return over a short period of time."