Amid a flat to weaker secondary, California came to the municipal market yesterday with a $3.5 billion refunding of economic recovery bonds, by far the largest deal to hit the market in a new-issue dominated week.

Barclays Capital priced the massive California deal in two series. Bonds from the $2.96 million Series A mature from 2010 through 2023, with yields ranging from 2.48% with a 3% coupon in 2013 to 4.85% with a 4.75% coupon in 2023. Bonds maturing from 2010 through 2012 will be decided via sealed bid. Bonds are callable at par in 2019, except bonds maturing in 2022, which are callable at par in 2016. Bonds from the $500 million Series B contain three split maturities in 2023, all yielding 3.375%, with coupons of 3.5%, 4%, and 5%. The bonds are not callable.

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