About this bond issuance
Projects funded include housing and emergency shelters, children's hospitals, public education facilities, and high-speed rail. A portion of this issuance will be used to refinance outstanding bonds to reduce the State's ongoing debt service costs.
The full list of projects being funded is located on Exhibit 1 of the Preliminary Official Statement under the "Documents" tab.
Investor presentation is available at https://roadshow.munios.com/roadshow-viewer.aspx?e=MPK26
ObligorThe obligor is the organization that holds ultimate responsibility for the bond issuance, and will ensure that investors get repaid.
The State of California
IssuerOften the obligor. However, sometimes issuers partner with an authorized conduit financing non-profit within their state or city to issue the bonds.
The State of California
AuthorityBefore an issuer can raise money for a project, they must first have the legal authority to do so. This authority is sometimes preceded by a general election, and awarded after the successful passing of a bond measure.
The issuance of each series of Bonds is authorized by the related Bond Act identified in Exhibit 1 of the Preliminary Official Statement (located in the Documents tab) approved by the voters of the State and by the related Resolution. Each Bond Act and the State General Obligation Bond Law in Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the California Government Code, as incorporated by reference into each Bond Act, provide for the authorization, sale, issuance, use of proceeds, repayment and refunding of the related series of Bonds.
SecurityThe security section is a breakdown of the funds an issuer is planning to use to repay its investors. This repayment can come from a variety of sources, including local taxes.
The Bonds are general obligations of the State, and each series of the Bonds is payable in accordance with the related Bond Act and Resolution out of the General Fund, subject under State law only to the prior application of moneys in the General Fund to the support of the public school system and public institutions of higher education. Each of the Bond Acts provides that the State will collect annually in the same manner and at the same time as it collects other State revenue an amount sufficient to pay principal of and interest on the related series of Bonds in that year. Each of the Bond Acts also contains a continuing appropriation from the General Fund of the sum annually necessary to pay the principal of and interest on the related series of Bonds as they become due and payable. No further appropriation by the Legislature is required to pay the principal of and interest on the Bonds. Under the State Constitution, the appropriation to pay the principal of and interest on the Bonds as set forth in the Bond Acts cannot be repealed until the principal of and interest on the related Bonds are paid and discharged.
Each of the Bond Acts provides that the bonds issued thereunder shall be and constitute a valid and binding obligation of the State of California, and the full faith and credit of the State is pledged for the punctual payment of the principal of, and interest on, the bonds as the principal and interest become due and payable.
For more details, please refer to the Preliminary Official Statement (located in the "Documents" tab).
PRIORITY OF ORDERS AS FOLLOWS:
1. California Retail
2. National Retail
The STO intends to make bonds available to both retail and institutional investors. For orders received during the retail order period, the STO reserves the right to limit the retail allotments on each maturity to 50% of the aggregate par value of each series combined at the final price. Stock orders are not permitted to be entered during the retail order period.
Definition of Retail Order: The State's intention is to have the Bonds placed, without further sale, with retail buyers. A Retail Order is defined as an order placed for an account of an individual, or a bank trust, investment advisor or money manager acting on behalf of an individual, with a maximum of $1,000,000 per account. Orders in excess of $1,000,000 may be submitted but will be subject to verification by the STO and the Joint Senior Managers. The investor's zip code must be included with all Retail Orders submitted.
All Managers and Selling Group Members agree that they will only submit Retail Orders, as defined for this engagement, that are on behalf of legitimate retail accounts or through any distribution agreement entered into by the Managers and that the STO and its Agents have the right during and after the retail order period to audit any order including any orders submitted through a retail distribution agreement, to verify that such order represents a legitimate Retail Order. Each member of the syndicate that submits orders pursuant to Distribution Agreements with other firms remains responsible to theState for compliance with all rules and requirements relating to the bond sale, including those related to the retail order period and establishing the issue price. If the STO determines that a firm has submitted a non-legitimate Retail Order, the STO may, at its sole discretion: (i) exclude the firm, or specific retail Distribution Agreement, from future transactions; (ii) disallow the takedown associated with such order; (iii) cancel the order; and/or (iv) take any other action deemed appropriate by the STO. The State's remedies in the event of non-compliance with these rules apply to all orders submitted by a member of the syndicate or selling group whether from the firms' own accounts or through Distribution Agreements.
The State requires that all syndicate and selling group members report their retail orders using the following categories on a maturity by maturity basis:
*California Direct Retail: Individual investors including high net worth investors
*California Professional Retail: Separately Managed Accounts, Trust Departments or Investment Advisors
*California Distribution Agreement (Direct): If through a Distribution Agreement and the investor is an individual, including high net worth individuals
*California Distribution Agreement (Professional): If through a Distribution Agreement and the investors are Separately Managed Accounts, Trust Departments, or Investment Advisors
*National Direct Retail: Individual investors including high net worth investors
*National Professional Retail: Separately Managed Accounts, Trust Departments, orInvestment Advisors
*National Distribution Agreement (Direct): If through a Distribution Agreement and the investor is an individual, including high net worth individuals
*National Distribution Agreement (Professional): If through a Distribution Agreement and the investors are Separately Managed Accounts, Trust Departments, or Investment Advisors
**Pursuant to MSRB Rule G-11, syndicate members and other brokers, dealers, and municipal securities dealers ('Dealers'), when submitting an order for the syndicate member orDealer's own account or for a 'related account' as defined in Rule G-11 (which includes, without limitation, proprietary orders for affiliates of the syndicate member or Dealer),must so inform Goldman Sachs at the time any such order is submitted.**