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California will tap bond market for $2.7 billion

February 22, 2013|By Alejandro Lazo
  • California will tap the bond market for $2.7 billion.
California will tap the bond market for $2.7 billion.

California will sell $2.7 billion worth of bonds in March, tapping the bond market for the first time since its credit rating was boosted earlier this year.

The Golden State will sell $2.2 billion worth of general obligation bonds, which are tax-exempt, and $310 million worth of bonds that are subject to taxes. The sale will be conducted March 12 and 13, according to state Treasurer Bill Lockyer’s office.

It’s the first time the state has sought debt financing since Standard & Poor's upped the state's credit score to A from A-. When giving the state that positive grade, the credit rating agency cited "California's improved fiscal condition and cash position, and the state's projections of a structurally balanced budget through at least the next several years."

In September, the state sold $1.75 billion worth of general obligation bonds. It sold $539.3 million worth last October.

The state has recently experienced a surge in revenue, but that influx in cash may be temporary, The Times reported recently. The state could see a dip in coming months because the bump in revenue was largely likely due to taxpayers paying some of their tax bills early ahead of expected tax hikes.

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