According to the Sacramento Business Journal, Craiglist is already running ads offering to buy California IOU’s.
The Journal also points out:
Second-Market, a company that specializes in trading illiquid assets such as private company stock and bankruptcy claims, is getting ready for a piece of the action. “We have a whole team working on it,” it quotes the firm’s CEO, Barry Silbert, as saying.
Wall Street hedge funds, municipal bond investors and other institutions are all expected to be interested in the bonds, as well, which have a 3.75 percent interest rate that matures Oct. 2…
A number of banks including Bank of America Corp., Wells Fargo & Co., JPMorgan Chase, Union Bank, Citibank, Bank of the West and US Bank said they will take the state’s promissory notes, but only until July 10.
Palo Alto-based Addison Avenue Federal Credit Union has also said it would honor the IOUs.
However, as Reuters notes:
Questions have arisen whether California’s tax-exempt IOUs can be bought, sold and traded.
The Securities and Exchange Commission must first determine if the IOUs are securities to regulate them, Ernesto Lanza, the general counsel to the Municipal Securities Rulemaking Board, said, adding that the board was not working directly with the commission on that decision.
“It looks like it has all the hallmarks of a security,” Lanza said. “If they are securities, I think they’re pretty clearly municipal securities.”
In other words, the federal government may try to clamp down on the buying and selling of California’s IOU’s.