With high yields attracting investors, California bonds traded stronger Monday amid an overall weaker tone in the general market.
Trader said Friday that spreads on tax-exempt California paper tightened, and the trend continued into Monday. “High-grade paper is trading tighter in California,” a Los Angeles trader said. “There is yield attraction in California. There was a small window when California general obligations 5% coupons traded at par. Now they are through that. But it’s at 4.80% instead of 3.80%. So absolutely yield levels are pulling people back in.”