California is postponing a $2billion bond sale, because of delays in pushing a "cash-management" bill through the state legislature. From The Bond Buyer:
The State Treasurer’s Office pulled a planned $2 billion GO bond sale off next week’s calendar after the cash-flow management bill stalled in the Assembly this week following its passage in the state Senate.
That legislation gives state budget and finance officials additional authority to manage the timing of payments for various state programs through the end of fiscal 2011.
In candid comments that would get anyone but a politician fired, Lockyear stressed how important it is for the bond sale to get done ahead of the next dreadful budget assessment:
Lockyer told the committee that bond funded construction projects could dry up by the summer if the state doesn’t get market access.
His office has a limited window to act before the release of the governor’s May revised budget proposal, which creates an issuance blackout for the treasurer’s office because of disclosure concerns.
“We’ve got until maybe mid-April to try and get to the market three or four times,” Lockyer said.
Can you imagine IBM's CEO saying "it is CRITICAL that we sell some corporate debt at current rates, before we release earnings that will cause our borrowing rate to soar"?
The poor Greeks are being lambasted by international bond investors for various "cash management" tricks, while California goes about its merry business doing the same thing.
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