The Bond Buyer recently reported on a report from the California Debt and Investment Advisory Commission that discussed the steep drop in CA zero issuance (zeros = cabs = capital appreciation bonds) in 2013. Their chart below shows that issuance is about half of what it used to be.

Act 182, passed in 2013 and effective on 1/2014 prevents CA School districts from issuing cabs with maturities greater than 25 year and it requires issues with maturities greater than 10 year to be callable. Using Bloomberg data as our source, we found that only 100 mlln worth of non callable zeros with maturities greater than 10 years were issued in 2013.

There simply are no more non callable Ca School District bonds being issued!!