California’s Bond Market Is Thriving
California sold $2.7B of general obligation debt Tuesday, leaving the state with a stunning fiscal turnaround that includes a budget surplus and its highest credit rating since 2001.
America’s most populous state is benefiting from turmoil in financial markets mixed with negative interest rates overseas. The state’s new 10-year securities were priced to yield 1.63%, Bloomberg reports.
"The state is doing great. It’s riding a wave of multiple years of growth," says senior portfolio manager Kathleen Meyer at City National Rochdale, which manages $4.7B in tax-exempt municipals. “If the state continues on an upward trajectory, there’s no doubt in my mind that we can see [rates under the benchmark municipals]," Meyer said, even before the state’s massive sale. [Bloomberg]
