Nov. 4 (Bloomberg) -- California, the largest municipal borrower, sold $1.3 billion of tax-exempt bonds today in an offering that pushed the amount of debt it has issued during the past five weeks to more than $10 billion.

Yields on the sale ranged from 5.50 percent in the 2034 maturity to 5.73 percent in the 2039 maturity, said Tom Dresslar, spokesman for state Treasurer Bill Lockyer. The most- populous and lowest-rated U.S. state sold the entire 2034 maturity, totaling $181.6 million, to individual investors, Dresslar said. Institutional investors such as mutual funds bought the remaining $1.12 billion.

California’s bonds account for 21 percent of fixed-rate issuance in the municipal market this quarter, data compiled by Bloomberg show. Since Oct. 2, the state and its Public Works Board have sold $4 billion in Build America Bonds and non- subsidized taxable issues and $5.3 billion of tax-exempt securities to raise infrastructure funds or refinance debt.

“Many investors have capacity issues impacting whether they can take on more of the credit,” Dan Solender, who oversees $12.3 billion as director of municipal bond management at Lord Abbett & Co. in Jersey City, New Jersey, said in an e- mail. “Each of their deals goes through the process of being structured in response to where the demand is coming from, and the pricing is almost independent from the rest of the market.”

Today’s sale was led by investment banks De La Rosa & Co., Stone & Youngberg LLC and Siebert Brandford Shank & Co.

Yields on top-rated 10-year general obligation bonds were little changed today at 3.18 percent, according to a daily survey by Municipal Market Advisors of Concord, Massachusetts. The index ranged from 2.95 percent to 3.22 percent in October.

To contact the reporter on this story: Jeremy R. Cooke in New York at jcooke8@bloomberg.net.

Last Updated: November 4, 2009 19:02 EST