California, Once Compared to Greece, Is Now Trading Better Than AAA
- State benefits from booming real estate, stock markets
- 5-year G.O. index trading at yields below AAA counterparts
A woman and three children cross the street at sunset near storefronts by the pier in Manhattan Beach, California.
Photographer: Patrick Fallon/BloombergThis article is for subscribers only.
Seven years ago, California was “the next Greece." Today, the state’s bonds are trading better than AAA.
As the Golden State benefits from record-breaking stock prices, Silicon Valley’s boom and a resurgent real estate market, demand for tax-exempt debt in the state with the highest top income tax rate in the U.S. is “insatiable," said Nicholos Venditti, a portfolio manager for Thornburg Investment Management. Spreads are so tight that Venditti has stopped buying California bonds for his national fund.