California on Thursday slashed a bond sale to $4.14 billion from $4.5 billion, signifying cold market conditions.

California hacked the total size of the deal by 8 per cent to $4.14 billion bonds could not allure enough demand to achieve the desired goal.

Apart from $2.82 billion in taxable bonds, the state's deal included $1.75 billion in Build America Bonds, while $1.31 billion in tax-exempt bonds.

Yields on bonds ranged from 3.75 per cent to 7.23 per cent for the taxable debt.

Yields on the tax-exempt bonds ranged from 2.95 per cent to 5.0 per cent.

Speaking on the issue, Janney Montgomery Scott's chief strategist, Guy LeBas, said, "Unfortunately, California seems to have come to market right when buyers are starting to balk at the absolute low level of yields."

State Treasurer Bill Lockyer's office stated that retail investors purchased $505.2 million in bonds, around one-third of the $1.55 billion offered to them.

It should be noted here that California has the lowest credit ratings in the US on its long term debt.