“California Plans $14B of Pre-Thanksgiving Debt,” by Rich Saskal, The Bond Buyer.
California missed out on a favorable environment for issuers through late summer and early autumn, said Ken Naehu, managing director for fixed income at Bel Air Investment Advisors in Los Angeles.
“That was a time when there was a lot of money chasing too few bonds,” he said.
Now the supply equation has turned around, as has the market’s tone, Naehu said.
“Just a few weeks ago, the market was in the buy anything mode,” he said. “The market seems to have shifted [to] a cautious tone of looking for value.”
That means California is likely to have to pay a price to place its debt, particularly given the continuous drumbeat of bad fiscal news about the state government.
“To move that amount of bonds is going to require some spread,” he said.
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