CA website sells state bonds directly to public
It seems like you can buy anything online these days, so it shouldn't be too much of a surprise that Californians can now buy bonds online, reports the Sacramento Bee
The promotional campaign to get Californians to purchase bonds at the state-run www.BuyCaliforniaBonds.com represents another California breakthrough - the first site to link consumers with brokerage firms that can place individual orders.
Promoting the site, Treasurer Bill Lockyer says that the bonds are a tax-free, secure investment that will help build schools, roads and parks in California. The average California bond yield was a 3.5 percent to 4.5 percent annual rate at the end of May.
"Voters adopted these bond proposals, and now we are giving them a chance to actively participate in the next phase of rebuilding California. People are more likely to maintain an interest in the way in which bond programs are implemented if they're personally invested in those efforts."
The campaign is starting off by allowing investors a chance to place orders on a $2.5 billion general obligation bond set to go on sale next Wednesday. It is hoped that the marketing campaign will reach a broad range of individual investors, instead of institutional investors such as hedge funds, mutual funds and brokerage firms, which buy the bonds and charge higher rates on resale, said David Hitchcock, a credit analyst for Standard & Poor's credit rating agency.
"The treasurer has expressed interest in having a greater portion of bonds held by individual investors," Hitchcock said. "Some people feel there's less volatility because individuals tend to buy and hold."
Along with the BuyCaliforniaBonds.com Web site, Gov. Arnold Schwarzenegger is launching a site that tracks how $42.7 billion in bonds is being spent.
"By paying down debt ahead of schedule and by controlling the growth in spending, as I've proposed in my budget, our credit rating can go up and our borrowing costs can go down," Schwarzenegger said in a statement.