According to the announcement of the sale by the mayor’s office, the bonds were sold to only institutional investors. Proceeds of the sale will be wired to the retirement system next week.
The 7.125% was lower than the 7.2% price reported to the city council when it approved the transaction (SeeSan Diego Council Approves Tobacco Settlement Funds Use for Pension Deficit), the announcement said.
The San Diego City Employees’ Retirement System is underfunded by around $1.4 billion. A two year investigation into the system resulted in conflict-of-interest charges against pension fund board members (See Former SD Pension Officials Trial Set for February ) who are accused of approving a plan that allowed the city to put less money into its retirement system while also approving larger pensions for some officials.