The state of California announced plans to sell in the range of $2 billion of tax-exempt general obligation bonds set to commence in early March. The sale will is the largest by a U.S. issuer of municipal debt in several months.
The sale, managed by JP Morgan Chase & Co. and Morgan Stanley, is vital for California in the face of the $20 billion budget deficit predicted for the next 16 months. Lawmakers are in the process of finding ways to minimize that debt by at least a quarter and bolster the state’s financial resources. The sale is part of those efforts and has been on the back burner since January when chief deputy, Steve Coony announced there would be no more debt sold until legislature agreed upon it.
California is the 8th largest economy in the world.
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