California, Here It Comes
The recession has hit it hard. The foreclosure rate is horrific. Housing prices are in free-fall. But don't count California's golden touch out ...
The recession has hit it hard. The foreclosure rate is horrific. Housing prices are in free-fall. But don't count California's golden touch out yet.
This week the state came to the municipal bond market with one of the biggest deals ever (the fourth largest): a $6.85 billion bond. It wasn't just big, it included the latest new thing in state and local bonds--$5.23 billion in Build America Bonds. These are taxable bonds that sell at higher interest rates. That is, the bonds are not tax-exempt to investors but, under the federal recovery act, the interest rate California is paying--7.4 percent--is subsidized by the federal government, bringing the interest cost to California down to 4.8 percent.
The bonds were gobbled up by investors within hours of the sale. Proceeds will be used for those infamous shovel-ready public works projects.
California is the third large issuer to test the Build America Bond waters.The University of Minnesota and the New Jersey Turnpike Authority have also issued BABs.
We invite you to discuss and comment on this article using social media.
In the Elusive Search for Affordable Housing, Clues Emerge1 day ago
California Leaders Vow to Fight Trump's Oil Drilling Order Before It's Even Signed21 hours ago
State and Local Governments Express Concern About Trump's Tax Plan22 hours ago
If Trump Defunds 'Sanctuary Cities,’ Public Health Could Suffer22 hours ago
Purdue University's Unprecedented Move to Acquire a For-Profit College23 hours ago
Court: Employers Can Pay Women Less Than Men Based on Their Past Salaries23 hours ago