A pair of recently completed bond sales through the office of California State Treasurer Fiona Ma are expected to have wide-ranging benefits for the state.
First, Ma announced the results of a competitive bid for $150 million in veterans general obligation bonds for the California Department of Veterans Affairs (CalVet). Proceeds from the sale will be used by CalVet to provide home loans to veterans in California.
CalVet was established in 1921 and began making low-interest rate home financing available to veterans after World War I. Since its inception, the CalVet Home Loan program has funded more than $8.5 billion of home loans to over 425,000 California veterans. The program’s guiding principle is to provide the best product for the lowest possible cost, without costing California taxpayers a penny.
A total of 11 bids were received from broker-dealers, with Barclays Capital Inc. submitting the winning bid with a true interest cost of 4.41 percent. The bonds will mature on dates ranging from 2026 to 2055 with initial yields ranging from 3.00 percent to 4.65 percent.
The bonds are rated Aa2 by Moody’s Investors Service, AA+ by S&P Global Ratings, and AA by Fitch Ratings. The bonds are scheduled to close on April 10, 2025.
For more information about the CalVet Home Loans, call 1-916-503-8318 or visit www.calvet.ca.gov/HomeLoans.
Also announced was the successful sale of $2.6 billion of tax-exempt, fixed rate General Obligation (GO) bonds. The sale included $1.2 billion of various purpose new money GO bonds and $1.4 billion of GO refunding bonds to refinance previously issued GO bonds. The bonds saw strong and balanced demand across all maturities from both individual and institutional investors, said state officials.
Proceeds of the new money bonds will provide funding for the following bond acts:
• Behavioral Health Infrastructure Bond Act of 2024
• California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access for All Act of 2018
• Kindergarten Through Community College Public Education Facilities Bond Act of 2016
• Water Quality, Supply, and Infrastructure Improvement Act of 2014
In addition, proceeds will pay down outstanding commercial paper notes that were issued under 13 different bond acts approved by voters between 1998 and 2018.
Proceeds of the refunding bonds will refinance bonds issued in 2015 and 2018 under 11 different bonds acts approved by voters between 1990 and 2008 and is projected to save taxpayers $134 million over the next 20 years, or $91 million on a present value basis.
The bonds were rated Aa2 by Moody’s Investors Service, AA- by S&P Global Ratings, and AA by Fitch Ratings. The all-in true interest cost for the bonds was 4.19 percent. The bonds will mature on dates ranging from 2026 to 2055 and bear interest rates ranging from 4.0 percent to 5.0 percent, with yields ranging from 2.71 percent to 4.37 percent.
The bonds were underwritten through the state’s underwriting syndicate led by joint senior managers J.P. Morgan Securities LLC and Loop Capital Markets LLC with Raymond James & Associates, Inc., serving as co-senior manager and 24 firms serving as co-managers.
The calendar of all upcoming state bond sales is available at BuyCaliforniaBonds.com.
