California began selling $1.55 billion of tax-exempt bonds with a preliminary yield of 2.51 percent on securities maturing in 2022.
The bonds offer 0.73 percentage point more yield than top- rated debt maturing in 10 years, according to data compiled by Bloomberg. That’s down from 0.84 percentage point on bonds with similar maturities sold in April. Thirty-year bonds were offered at 3.75 percent, or 0.86 percentage point above AAA securities.
Treasurer Bill Lockyer is selling $1 billion of general obligations for public-works projects and $550 million to refund debt. Orders are being taken from individual investors today and Sept. 24 before institutions such as mutual funds get their chance on Sept 25, the last day of the sale.
With another $500 million slated for market in October, Lockyer plans to offer about $5.3 billion this year, about a quarter of the state’s sales in 2009.
California’s economy is bigger than India’s, ranking ninth in the world as measured by gross domestic product, according to the state Finance Department. Its bonds have returned 6.6 percent in 2012, beating all but three states and the 5.7 percent gain for the broader $3.7 trillion muni market, according to Standard & Poor’s data.
S&P rates California A-, its seventh-lowest investment level and the worst grade it gives any state.
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