Why would they be especially high yield bonds if someone did not consider them high risk?
D
Well they could be high risk or they could have significant uncertainty within them.
For example, they could have a lot of provisions that allows them to be called prior to the normal term under a variety of conditions that may happen (probably not considering how low interest rates are now.) The bonds could have a lot of deferred principal payments until a few years out, which would drive up their yeild.
Whatever the reason, it will be interesting to see what kinds of clauses the bonds have within them. No matter what, we can say that since they will be tax exempt to federal and California state income taxes (except to the tune that the min alternate tax catches someone), they will be more popular with California individuals and corporations wanting to shelter some of their income.