SQUIRE DRAFT 9/11/14 PRELIMINARY OFFICIAL STATEMENT DATED SEPTEMBER 11, 2014 NEW ISSUE – BOOK ENTRY ONLY Ratings: Moody’s: Aa3 S&P: A Fitch: A (See “RATINGS” herein) In the opinion of Bond Counsel to the State of California (the “State”), interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), and interest on the Bonds is exempt from State personal income taxes. See “TAX MATTERS” herein. $2,290,000,000* STATE OF CALIFORNIA GENERAL OBLIGATION BONDS $940,000,000* $200,000,000 * n or qualification or filing under the under or filing qualification or n VARIOUS PURPOSE VARIOUS PURPOSE GENERAL OBLIGATION BONDS GENERAL OBLIGATION BONDS (GREEN BONDS) $950,000,000* $200,000,000 * VARIOUS PURPOSE VARIOUS PURPOSE GENERAL OBLIGATION REFUNDING BONDS GENERAL OBLIGATION BONDS (MANDATORY PUT BONDS) ll this Preliminary Official Statement constitute an offer to sell or the offer sell to an constitute Statement Official Preliminary this ll Dated: Date of Delivery Bonds Due: As shown under “SUMMARY OF THE OFFERING” The State of California is issuing $940,000,000* Various Purpose General Obligation Bonds (the “Construction Bonds”), $200,000,000* Various Purpose General Obligation Bonds (Green Bonds) (the “Green Bonds”) and $950,000,000* Various Purpose General Obligation Refunding Bonds (the “Refunding Bonds”), all bearing interest at fixed rates (collectively, the “Fixed Rate Bonds”), and $200,000,000*Various Purpose General Obligation Bonds (Mandatory Put Bonds), comprised of __________series designated as Series ___ and Series ___ Bonds (each a “Series of Mandatory Put Bonds”), each bearing interest at a fixed rate to the applicable Mandatory Tender Date as further described herein (the “Mandatory Put Bonds” and together with the Fixed Rate Bonds, the “Bonds”). The Bonds are general obligations of the State to which the full faith and credit of the State are pledged. The principal of and interest on all State general obligation bonds, including the Bonds, are payable from any moneys in the General Fund of the State, subject under State law only to the prior application of such moneys to the support of the public school system and public institutions of higher education. See “AUTHORIZATION OF AND SECURITY FOR THE BONDS.” Certain of the Fixed Rate Bonds are subject to optional and mandatory sinking fund redemption prior to their stated maturities, as described herein.* See “PROVISIONS APPLICABLE TO THE FIXED RATE BONDS—Redemption.” In addition, each Series of Mandatory Put Bonds is subject to optional redemption prior to its stated maturity as described herein.* See “PROVISIONS APPLICABLE TO THE MANDATORY PUT BONDS–– Redemption.” Each Series of Mandatory Put Bonds additionally is subject to mandatory tender for purchase on any date on or after its First Call Date, including the applicable Mandatory Tender Date, as described herein. See “SUMMARY OF THE OFFERING” and “PROVISIONS APPLICABLE TO THE MANDATORY PUT BONDS––Tender Provisions.” There is no source of moneys to pay the purchase price of the Mandatory Put Bonds upon mandatory tender thereof on a purchase date, including the applicable Mandatory Tender Date, other than proceeds of remarketing thereof. If the State does not purchase Mandatory Put Bonds on a purchase date, including the related Mandatory Tender Date, such non-purchase shall not constitute an event of default. There is no liquidity facility in place for the payment of the purchase price of Mandatory Put Bonds on a purchase date, including the applicable Mandatory Tender Date. Each Series of Mandatory Put Bonds is subject to adjustment to another interest rate period, as further described herein. THIS OFFICIAL STATEMENT IS NOT INTENDED TO PROVIDE INFORMATION WITH RESPECT TO ANY SERIES OF MANDATORY PUT BONDS AFTER ADJUSTMENT TO ANY NEW INTEREST RATE PERIOD. Interest on the Fixed Rate Bonds is payable on April 1 and October 1 of each year, commencing April 1, 2015, at the respective rates per annum set forth in “SUMMARY OF THE OFFERING.” Interest on each Series of Mandatory Put Bonds is payable on June 1 and December 1 of each year, commencing December 1, 2014, at the respective rates per annum set forth in “SUMMARY OF THE OFFERING” until the applicable Mandatory ale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registratio to prior beunlawful sale would or solicitation offer, such which in jurisdiction anyin securities of, these ale Tender Date. The Bonds may be purchased in principal amounts of $5,000 or any integral multiple thereof in book-entry form only. See “PROVISIONS APPLICABLE TO ALL BONDS—General” and APPENDIX B—“THE BOOK-ENTRY ONLY SYSTEM.” This cover page contains certain information for general reference only. It is not a summary of the security or terms of the Bonds. Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision. ________________________________________________________ MATURITIES, MANDATORY TENDER DATES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES OR YIELDS AND CUSIPS (See “SUMMARY OF THE OFFERING”) ________________________________________________________ The Bonds are offered when, as and if issued by the State and received by the Underwriters, subject to the approval of validity by the Honorable Kamala D. Harris, Attorney General of the State of California, and by Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the State. Orrick, Herrington & Sutcliffe LLP and Squire Patton Boggs (US) LLP are serving as Co-Disclosure Counsel to the State with respect to the Bonds. Orrick, Herrington & Sutcliffe LLP and Stradling Yocca Carlson & Rauth, a Professional Corporation, are serving as Co-Disclosure Counsel to the State y Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances sha circumstances no Under or amendment. to completion are subject herein contained the information and Statement y Official * Preliminary, subject to change. Official Statement Dated: ______ __, 2014 This Preliminar This s any be there shall nor buy, offer to of an solicitation jurisdiction. such any of laws securities regarding Appendix A. Certain matters will be passed upon for the Underwriters by their counsel, Hawkins Delafield & Wood LLP. Public Resources Advisory Group is serving as the Financial Advisor to the State with respect to the Bonds. The Bonds are expected to be available for delivery through the facilities of The Depository Trust Company on or about October 7, 2014. ________________________________________________________ HONORABLE BILL LOCKYER Treasurer of the State of California Citigroup Wells Fargo Securities(1) BofA Merrill Lynch(2) (Joint Senior Manager) (Joint Senior Manager) (Joint Senior Manager Green Bonds) Jefferies (Co-Senior Manager) Academy Securities, Inc. Alamo Capital Barclays Blaylock Beal Van, LLC BMO Capital Markets Cabrera Capital Markets, LLC City National Securities, Inc. Drexel Hamilton LLC Fidelity Capital Markets Goldman, Sachs & Co. J.P. Morgan Mischler Financial Group Morgan Stanley O’Conner & Company Securities Piper Jaffray & Co. Ramirez & Co., Inc. Raymond James RBC Capital Markets RH Investment Corporation Siebert Brandford Shank & Co., L.L.C. Southwest Securities, Inc. Stifel Wedbush Securities Inc.. William Blair & Company, LLC The Williams Capital Group, L.P (1) Billing and delivery agent for the Construction Bonds, the Refunding Bonds and the Mandatory Put Bonds (2) Billing and delivery agent for the Green Bonds SUMMARY OF THE OFFERING $940,000,000* STATE OF CALIFORNIA VARIOUS PURPOSE GENERAL OBLIGATION BONDS Base CUSIP†: Maturity Date Principal Interest Price or CUSIP† Maturity Date Principal Interest Price or CUSIP† (October 1) Amount Rate Yield Suffix (October 1) Amount Rate Yield Suffix $200,000,000* STATE OF CALIFORNIA VARIOUS PURPOSE GENERAL OBLIGATION BONDS (GREEN BONDS) Base CUSIP†: Maturity Date Principal Interest Price or CUSIP† Maturity Date Principal Interest Price or CUSIP† (October 1) Amount Rate Yield Suffix (October 1) Amount Rate Yield Suffix * Preliminary, subject to change. † Copyright 2014, American Bankers Association. CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by the CUSIP Service Bureau, managed on behalf of the American Bankers Association by Standard & Poor’s. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services Bureau. CUSIP numbers have been assigned by an independent company not affiliated with the State and are included solely for the convenience of the registered owners of the applicable Bonds. Neither the State nor the Underwriters are responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds. $950,000,000* STATE OF CALIFORNIA VARIOUS PURPOSE GENERAL OBLIGATION REFUNDING BONDS Base CUSIP†: Maturity Date Principal Interest Price