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California Sold $6.5 Billion GO Bonds Print E-mail
Written by TFB   
Last Updated on April 04, 2011

The State of California sold $6.5 billion of General Obligation (GO) bonds. Due to higher than expected interest from investors, the size of the bond offer was increased from $4 billion to $6.5 billion. Because California has a lower credit rating than other states and the U.S. Treasury, these bonds were sold at higher yields than Treasury bonds of comparable maturity, whereas due to federal income tax exemption, the yield on a municipal bond is typically lower than that on a Treasury bond. The yield on the bonds ranged from 3.2% for bonds due in 2013 to 6.1% for bonds due in 2038. All these yields are exempt from Federal and California state income taxes. They are also exempt from the Alternative Minimum Tax (AMT). For a California resident, the tax equivalent yield can go as high as 10% on the longer term bonds.

The detailed results for the bonds sold in this offer are listed in this document.


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