About this bond issuance
Proceeds of the Construction Bonds will be used to (1) pay certain of the State's outstanding general obligation general obligation commercial paper notes (the "CP Notes") as they mature, and (ii) pay certain cost of issuance of the Construction Bonds.
Proceeds of the Refunding Bonds will be used to (i) current or advance refund certain of the State's outstanding general obligation bonds for debt service savings and (ii) pay certain costs of issuance of the Refunding Bonds. See "THE BONDS--Plan of Refunding" in the preliminary official statement, located in the document tab.
Examples of Projects Funded by Construction Bonds in the State of California include but are not limited to Clean Water, Clean Air, Safe Neighborhood and Coastal Protection, Children's Hospital, Disaster Preparedness and Flood Prevention, Highway Safety, Traffic Reduction, Air Quality and Port Security, Housing and Emergency Shelter, K-12 Public Education Facilities, Public Safety, Public Higher Education, Education Facilities, Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection,Veterans Housing, Water Quality, Supply, and Infrastructure Improvement .
ObligorThe obligor is the organization that holds ultimate responsibility for the bond issuance, and will ensure that investors get repaid.
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.
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 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. The pledge of the full faith and credit of the State alone does not create a lien on any particular moneys in the General Fund or any other assets of the State, but is an undertaking by the State to be irrevocably obligated in good faith to use its taxing powers as may be required for the full and prompt payment of the principal of and interest on all general obligation bonds as they become due. The only provision of the State Constitution that creates a higher priority for any State fiscal obligation is a provision directing that from all State revenues there will first be set apart the moneys to be applied by the State for the support of the public school system and public institutions of higher education. In the past when cash resources in the General Fund have been constrained, State officials have worked within their powers granted by State law to manage cash resources to ensure that payments to schools and universities and for general obligation debt service would be made. On any debt service payment date, all general obligation bonds have an equal claim on moneys in the General Fund on that date for payment of debt service.
First Coupon Payment: 8/1/2017
Dated Date: 3/14/2017