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The State of California General Obligation Bonds

We are pleased to announce that Fidelity Capital Markets has been chosen as a co-senior manager for California's upcoming $1.9 billion1 general obligation bonds sale.

What is the opportunity?

The state of California will come to market with $1.9 billion1 in general obligation bonds. The proceeds are split between $790 million of "New Money Bonds" that are being issued to fund projects under certain of the Bond Acts (please see the POS for specific projects) pay certain outstanding general obligation commercial paper notes of the state as they mature and $1.1B of "Refunding Bonds" to current or advance refund certain of the State's general obligation bonds for debt service savings.

The bonds are direct general obligations of the state to which the full faith and credit of the state are pledged. The principal of and interest on the bonds are payable from any moneys in the General Fund of the State, subject only to the prior application of such moneys to the support of the public school system and public institutions of higher education.

Key benefits

The bond sale offers several attractive benefits for individual investors who are residents of California, including the potential for stable, tax-exempt income; priority allocation when bonds are issued; and prices and yields that match those available to institutional investors.

How to place an order

Individual investors may place orders Tuesday, March 3. The sale may close early, due to market conditions or because all bonds may be allocated.

Additional resources

Municipal Bonds
Review the risks and benefits of investing in municipal bonds.

California State Treasurer
Learn more about California bonds and notes and about how to become an investor.

Municipal Bonds: Understanding Credit Risk (PDF)
Learn more about assessing credit risks when purchasing municipal bonds in this SEC investor bulletin.

Q4 bond update: Oil price shock wave
See what our experts are saying about the bond market and why they're recommending a cautious approach.

This information does not constitute an offer of any securities for sale.
1. Preliminary, subject to change
Interest income earned from tax-exempt municipal securities generally is exempt from federal income tax, and may also be exempt from state and local income taxes if you are a resident in the state of issuance. A portion of the income you receive may be subject to federal and state income taxes, including the federal alternative minimum tax. Before making any investment, you should review the official statement for the relevant offering for additional tax and other considerations.
The municipal market can be adversely affected by tax, legislative, or political changes and the financial condition of the issuers of municipal securities. Investing in municipal bonds for the purpose of generating tax-exempt income may not be appropriate for investors in all tax brackets or for all account types. Tax laws are subject to change and the preferential tax treatment of municipal bond interest income may be revoked or phased out for investors at certain income levels. You should consult your tax adviser regarding your specific situation.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties.


an independent organization that assigns credit ratings to debt instruments and securities to help investors assess credit risk


Standard & Poor's (S&P) Corporation

an independent company that provides investors with market intelligence in the form of credit ratings, indices, investment research and risk evaluations and solutions



the percentage of return an investor receives based on the amount invested or on the current market value of holdings; it is expressed as an annual percentage rate; yield stated is the yield to worst — the yield if the worst possible bond repayment takes place, reflecting the lower of the yield to maturity or the yield to call based on the previous close