California State Treasurer Fiona Ma announced the sale of $2.3 billion of State of California general obligation bonds, which included the refinancing of more than $2 billion of bonds issued in April 2009 when the state was experiencing budget challenges and interest rates were higher.
The refinancing will save taxpayers more than $1 billion in debt service costs over the next 19 years, or more than $739 million on a present value basis. The sale took place during her birthday this week.
“It’s a happy gift for all Californians,” said Treasurer Ma, “and a huge win for California. These savings, the most ever from a sale of state general obligation bonds, can be used to pay for other budget priorities of the Governor and Legislature. My office will continue to refinance the state’s existing debt to reduce debt service costs whenever possible.”
Some key statistics from this sale:
- Final size: $2,291,850,000
- Final yields to investors ranged from a low of 1.52% for a 2020 maturity to a high of 3.18% and 3.52% for a 2049 maturity with 5% and 4% coupons, respectively
- True interest cost: 3.34%
The joint senior managers for the sale were Citigroup and Bank of America Merrill Lynch. Ramirez & Co., Inc. served as co-senior manager. There was also a large syndicate of co-managers and selling group members. “I’d also like to thank my talented staff for their technical acumen and commitment to small details – the huge success of these transactions reflects their hard work,” Ma said.
Treasurer Ma also expects to sell California general obligation bonds again on March 26 and April 11, 2019. The calendar of all upcoming state bond sales is available at BuyCaliforniaBonds.com.
This article was released by the California State Treasurer’s Office.