SAN FRANCISCO — California is back on the bond calendar.
The State Treasurer’s Office is now planning to price $2 billion of general obligation bonds on March 11, following a two-day retail order period, spokesman Tom Dresslar said Thursday.
The deal had been planned for next week, but the treasurer’s office pulled the deal off the calendar after related cash-flow management legislation got hung up this week in the Assembly.
The Assembly approved the cash-management bill Thursday morning, clearing the way for the bond sale.
The cash-flow bill was structured to give rating agencies and investors confidence that the state government will be able to manage its cash-flow issues without a repeat of 2009, when it had to pay many creditors with IOUs to preserve money for debt service and other priority payments.
After easily clearing the Senate, the bill had stalled in the Assembly after the Republican minority protested that budget bills were going to floor votes without adequate vetting.
The cash-flow bill is an urgency measure, and required a two-thirds vote, meaning at least some support was needed from the minority party. The Assembly held a budget hearing on the bill Wednesday, and it cleared the full Assembly Thursday with 54 votes, according to Dresslar — the bare minimum needed to clear the two-thirds threshold.
Gov. Arnold Schwarzenegger, whose Department of Finance was deeply engaged in writing the legislation, is expected to sign the bill.
“We’re pleased that the Legislature has given its final approval to this significant improvement to our cash-management structure,” Dresslar said. “We believe it should be viewed very favorably by the ratings agencies and the market.”
Morgan Stanley and JPMorgan are the book-runners for the March 11 tax-exempt deal.
Dresslar said the treasurer’s office is still planning to sell about $2 billion of taxable GOs later in March, including a Build America Bonds component.
The deals could be upsized if demand warrants, Treasurer Bill Lockyer told the Assembly Budget Committee Wednesday.