California on Wednesday completed the sale of $8.8 billion of short-term revenue anticipation notes in its annual borrowing with a view to enhance cash flow.

Retail investors purchased 75 per cent of the notes, representing 75.4 per cent of the total.

The noted that will mature next year on May 25 will pay an annualized tax fee yield of 1.25 per cent, while the notes maturing June 23 will fetch 1.5 per cent.

The California note sale was larger than all of this week’s long-term bond sales by municipal issuers.

Speaking on the topic, treasure Bill Lockyer said, “We have a lot of work to do to fix our structural budget defects. But in the short term, this successful sale will help restore the state's fiscal equilibrium.”

However, the yields were far lowers than expected. Many experts had projected that the notes would yield over 3 per cent.

Total orders exceeded the amount of notes on sale by $430 million.