State of California Issuing $2.3 Billion in General Obligation Bonds
The State registered an unemployment rate of 4.2% at the end of December, 2018, which is .3 of 1% higher than the national unemployment rate of 3.9%. The State’s median household income was $67,169, which is above the national median of $57,652. The State’s employment growth rate has exceeded that of the nation in four of the last five years. The exception occurred in most recent year, 2018, in which California’s annual growth rate was 1.3% vs. the national rate of 1.6%,
According to Merritt Research Services, LLC, a provider of municipal bond research and data, the State’s total governmental activities revenues grew by 4.1% in fiscal year 2017 over the previous year.
About the Bonds
The State intends to sell the bonds by negotiated sale during the week of March 4, 2019. The principal and interest on all State General Obligation bonds, including the Bonds being sold, are payable from moneys in the General Fund, subject under state law only to the prior application of moneys in the General Fund to the support of the public school system and public institutions of higher education. Although the Bonds constitute a valid and binding obligation of the state, and the full faith and credit of the State is pledged, the pledge of the general fund does not create a lien on any moneys in the general fund or any other assets of the state.
The bonds are being sold in two parts. The $250,000,000 General Obligation various purpose bonds will be used to finance various public projects and $2,050,000 to refund a bond issue from 2009 . The remaining proceeds are to pay the costs of issuance. Interested parties should consult the official statement for more specific and final details on the use of bond proceeds and any intended refundings. All proposed financing terms are subject to change prior to the final sale of the Bonds.
According to the bond prospectus, the bonds have been rated Aa3 by Moody’s, AA- by S&P Global Ratings Group and AA- by Fitch.
Interest on the Bonds is in the opinion of Bond Counsel tax-exempt for federal income and from personal income taxes in the state of California.
Details on the purposes, tax-status, security, as well as other matters and risks pertaining to these bonds can be found in the preliminary official statement (register on the MuniOS website. After registering, visitors can link direct to the official statement by searching for the State of California.
Statistical Snapshot of Key State of California Financial and Economic Indicators
These facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only. Potential investors should rely only on the official documents and figures provided in the official statement (prospectus). Although the numbers presented in this summary are primarily derived from public documents, including issuer audits, issuer reports and other public sources such as federal reporting agencies , they are not intended to replace official information presented in connection with the bond sale. Medians may differ from official sales documents due to methodology or survey base variances.