Calif. begins selling $4 billion in bonds

SACRAMENTO The construction industry was cheering along with /*Wall Street*/ investors on Monday after California began testing the market for the first time since the credit crunch last fall. If all $4 billion in general obligation bonds are sold by Wednesday, $500 million of it will help restart public works projects that have been stalled for months.

"I know they'd like to see this come about and put more work out there to bid, so that a lot more people can go back to work," said Carl Edwards, an unemployed construction industry worker.

With federal infrastructure money still making its way to California, there are more than 5,000 road and other infrastructure projects on hold; that hold has contributed to California's 10.5 percent /*unemployment*/.

"We want to get back to the credit markets, sell California bonds and use those proceeds to help get back into the infrastructure game as quickly as possible," said H.D. Palmer, California Department of Finance.

A successful California bond offering isn't a sure thing. The state budget crisis made Wall Street nervous enough to give the Golden State the lowest credit rating in the country. But, with tax-free yields of up to 6 percent, it is an attractive investment to individuals.

"From the standpoint of demand, I think today was a clear indication that the bond market -- there's still a lot of investors out there who are hungry for tax-free bonds," said Joseph Eschleman, Wachovia Securities.

There will be one more day of selling to individual investors, and then powerhouse institutional investors get a chance to put California over the magic $4 billion mark; and with it, maybe a hiring spree.

"I'm crossing my fingers and saying a prayer," said Edwards.

To help tide over those out of work, the state assembly finally approved a 20-week extension in jobless benefits for the long-term unemployed. Nearly 500,000 eligible Californians have almost maxed out their eligibility and will qualify for more help with the second extension.


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