What is the opportunity?
The State of California is expected to come to market with $2.7 billion1 in General Obligation Bonds.
The state plans to issue two series of General Obligation Bonds: $615 million1 in Various Purpose General Obligation Bonds ("Construction Bonds"), which will be used to: (i) fund certain projects, (ii) pay certain of the state's outstanding general obligation commercial paper notes as they mature and (iii) pay certain costs of issuance; and $2,085 million1 in Various Purpose General Obligation Refunding Bonds, which will be used to: (i) current or advance refund certain of the state’s general obligation bonds for debt service savings and (ii) pay certain costs of issuance.
The principal of and interest on all state general obligation bonds, including these bonds, are payable from monies in the General Fund, subject under state law only to the prior application of monies in the General Fund to the support of the public school system and public institutions of higher education.
These bonds are rated "Aa3" by Moody's and "AA-" by S&P.2
Traditionally, municipal bonds will be subject to optional call features, and term bonds will generally have a Mandatory Sinking Fund feature. Please review the structure on the day of the pricing before placing an order.
The bond sale offers attractive benefits to individual investors, including prices and yields that match those available to institutional investors, the potential for stable income through the call dates, and, for California residents, federal and state tax-exemption on the bond coupon payments.
How to place an order
The offering is expected to price the week of August 29,1 although market conditions or the discretion of the issuer may affect this timeline or the amount of bonds offered. Individual investors can place orders online or by calling a Fidelity representative at 800-554-5372. To stay up-to-date on pricing, credit rating changes, and more, please sign up for Fidelity Alerts or visit our Municipal Bond New Issue offerings page.