A multi-billion-dollar surge of bond issues by state and local governments is making California, once again, the nation's top issuer of municipal debt, the Bloomberg financial news service calculates.
Bloomberg said that California governments have issued $46.2 billion in new debt so far in 2013, a 13 percent increase from 2012, pushing the state ahead of New York for the first time since 2010. Bloomberg calculates that New York has sold $36.4 billion in municipal debt this year, down 18 percent from 2012.
The news service credits the state's improving economy and better fiscal health, especially at the state level, with sparking the uptick in new government debt.
"They've really gotten their fiscal house in order," Bloomberg quotes Peter Hayes, who heads municipal bonds at New York-based BlackRock Inc.. "Now that the economy is stronger, they feel more confident that strength is sustainable, and that gives them the confidence to borrow."
As the state's financial indices have improved, so have its credit ratings, and bond buyers have demanded as little as three-tenths of one percent in extra yield, the lowest margin in years.
The largest California bond sale this year was a $2.3 billion offering by the Foothill/Eastern Transportation Authority in Orange County, an operator of toll roads. The state, meanwhile, is planning to sell about $3 billion in new general obligation bonds by mid-year, plus another $7 billion in general obligation and lease-revenue bonds in the following fiscal year.
PHOTO: Trader Kevin Colter, left, works on the floor of the New York Stock Exchange on June 28, 2013. Associated Press/Richard Drew