California started giving out registered warrants, unofficially called scrips or IOUs, last week due to its cash-strapped state, according to a Los Angeles Times story by Reynolds Center intern W.J. Hennigan.
This has caused warrant sellers and buyers to hit the Internet, making warrant deals on sites like Ebay and Craigslist. Some buyers are looking to profit from the warrants annualized interest rate, while cash-desperate sellers are hoping to squeeze any money they can from the IOUs.
California’s bond debt has also plummeted, down graded from A-minus to BBB status, only a step away from receiving the “junk” rating of BB.
View the story here. To learn more about bonds, visit our recent story on Electronic Municipal Market Access here.