California plans to sell $5.4 billion of revenue anticipation notes the week of Sept. 12 to pay off the bridge loan secured at the end of July to avoid market chaos, according to the state treasurer’s office. Wells Fargo Securities and Barclays Capital are joint senior managers.
The state has also announced underwriting teams for several tentative deals, including two general obligation bond sales later in the year. Tom Dresslar, spokesman for Treasurer Bill Lockyer, said the specifics of the GO sales are uncertain, and there may only be one.
Bank of America Merrill Lynch and Stone & Youngberg were named joint senior managers for one GO sale, and Goldman Sachs & Co. and JPMorgan were tapped for the other.
Lockyer secured the bridge loan from a group of eight banks on July 26 just before the Aug. 2 deadline for Congress to raise the nation’s debt ceiling.
The loan allowed the state to postpone its regular Ran sale in the face of feared market turmoil as the debt ceiling debate dragged on. The yield on the loan notes is 0.237% with a maturity of Nov. 22. The state scored a 1.4% yield last year when it sold $6.7 billion of interim Rans.
In 2010, California took a $6.7 billion bridge loan to give the state time to prepare a public Ran sale after the state budget was adopted 100 days into the fiscal year. The loan from a group of six financial institutions was repaid after California sold $10 billion of notes in the public markets in November.