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| California cuts bond sale over prison legal battle |
| By latimes.com |
| Published: 11/20/2009 |
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California today pared back its last big tax-free bond sale of 2009, citing legal questions about funding for a prison project. Treasurer Bill Lockyer sold $743 million in lease revenue bonds for the state Public Works Board instead of the $1.34 billion that had been planned. The deal was slashed in size because funding was dropped for a new death-row-inmate complex at San Quentin prison. The fate of that complex is in limbo because of an ongoing legal battle between the Legislature and Gov. Arnold Schwarzenegger over certain budget items that he has vetoed. "Legal questions arose Wednesday about whether the San Quentin facility could be funded with the bonds," said Tom Dresslar, Lockyer’s spokesman. "The state did not have enough time to address those issues and decided to drop the project from the sale." The smaller deal size allowed the state to slightly trim the interest rates on some of the bonds. For example, the Series I bonds maturing in 10 years will pay a tax-free annualized yield of 5.10%, a sliver less than the 5.12% the state had preliminarily set. Read More. |
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