California forced to raise yields
Californian state bonds were badly in demand just few years back, when the US economy was riding high. But the sub-prime crisis and the Lehman collapse last year have brought a sea change to all that.
Now California government has been forced to raise the yield on the new series of bonds it wants to sell in the market, because there were no takers at the indicated yield. The government has also been forced to cut down the total bond value to 4.1 billion dollars due to lower demand.
The California government , like many other US states, is running on huge budget deficit and it has to continue to borrow money from the market at high interest rates for many more months to come.