So what if California has the lowest credit rating of any state in the nation - Treasurer Bill Lockyer's plan to sell up to $4 billion in taxable bonds is attracting lots of interest from big investors.
The bonds are expected to be priced tomorrow. From Tom Petruno at Money & Co.:

The talk in the marketplace today was that the 30-year bonds in the state's offering would pay an annualized yield of about 7.4%. With the government covering 35% of that, the net interest cost to the state would be about 4.8%. That would be a significant savings compared with the 6.1% yield California paid on 30-year tax-free bonds it sold March 24.