California Shrinks Planned Tax-Exempt Sale, Expands Taxable
ALAMEDA, Calif. – With tax-exempt yields up dramatically this week, California said it would reduce next week’s planned tax-exempt issuance by more than $1 billion, while selling more taxables.
The state will upsize Friday’s planned taxable general obligation bond pricing by $750 million, to $2.75 billion, while cutting next Tuesday’s scheduled tax-exempt GO pricing by $750 million to $1 billion, Tom Dresslar, spokesman for Treasurer Bill Lockyer said in a statement late Wednesday. The deal will include $2.5 billion in federally subsidized Build America Bonds.
A $267 million tax-exempt lease-revenue bond deal for the California State Public Works Board, scheduled for sale Tuesday, has been cancelled, Dresslar said. A separate $102 million lease-revenue bond Tuesday may also be pulled, though for now it remains on the calendar.
“The tax-exempt municipal bond market is a cold, cold world right now for issuers and taxpayers,” Dresslar said in a statement.
Tax-exempt yields rose for the third straight session Wednesday, with 30-year yields reaching 15-month highs.