More on California Fiscal Policy: Paying for Bondage - Market Rates Are Down

Published October 10, 2014

Earlier this month, the State Treasurer issued his annual debt report with good news for the State.

He concluded that "California’s credit profile and supply factors" contributed to reducing the relative cost of issuing State general obligation debt since mid-2013.

Since last autumn, California refunded $2.2 billion of its out­standing bonds and reduced long-term debt service costs by about $363.3 million. The decline, according to the Treasurer, was due especially to “low issuance supply, a weakening economy and geopo­litical concerns.”

For the 30-year period starting June 30, 2014, the Treasurer expects the state General Fund to pay about $61.6 billion in interest (on principle of about $72.3 billion) in debt service on existing fixed-rate non-liquidating bonds.

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