October 4, 2013
On Wednesday, October 2, the Governor signed AB 182 (Buchanan) regarding Capital Appreciation Bonds (CABs). While prior versions of the bill also limited the use of Current Interest Bonds (CIBs), the version that ultimately went to the Governor maintained existing Government Code authority to issue Current Interest Bonds (CIBs) with a 40-year maximum term. AB 182 includes restrictions on CABs including, but not limited to, a maximum term of 25 years and a debt service ratio limit of 4:1 for each series. The bill also stipulates additional transparency requirements for CIBs with maturities between 30 and 40 years.