California should limit negotiated bond sales by school districts and restrict underwriters and financial advisers’ involvement in campaigns for voter approval of the offerings, according to state Treasurer Bill Lockyer.
Morgan Stanley and Citigroup Inc., criticized by California for arranging investment bets against state bonds, pitched Treasurer Bill Lockyer on ideas for legislation to sell $25 “minibonds” to expand sales to individuals, records from his office show.
California, poised for its first credit upgrade by Standard & Poor’s since 2006, has sold almost one-third of a $1.35 billion debt issue with its relative borrowing cost at the lowest point in more than three years.
Only eight months ago, Bill Lockyer was the envy of California politicians. Undefeated in 39 years as assemblyman, senate leader, attorney general and treasurer, the Democrat won 5.4 million votes in his 2010 re-election, more than any other state official in the U.S.
California, poised for its first credit upgrade by Standard & Poor’s since 2006, got orders for almost 31 percent of $1.35 billion of bonds being sold with its relative borrowing cost at the lowest point in more than three years.
California will sell an estimated $2 billion of general-obligation bonds this month after benchmark yields on municipal debt touched a three-month low Sept. 27, a spokesman for Treasurer Bill Lockyer said.
California had the outlook on $75.4 billion of general obligations raised to positive from stable by Standard & Poor’s, which said Governor Jerry Brown’s plan to pay down debt and build reserves may lead to an upgrade.