Wall Street is gearing up to trade the registered warrants – de facto IOUs – issued by cash-strapped California, which last week declared a fiscal emergency amid a legislative stalemate over how to close a $24bn budget gap. Hedge funds, municipal bond investors and other institutions are all interested in trading the warrants, which are transferable and pay an annual rate of 3.75 per cent,  the FT said. California has so far issued $53m of IOUs, and if the budget impasse persists,  could issue more than $3bn worth by the end of July for payments such as tax refunds, welfare and vendor bills.

This entry was posted by Stacy-Marie Ishmael on Monday, July 6th, 2009 at 4:56 and is filed under Capital markets. Tagged with california. Edit this entry.