Capitol Alert

The latest on California politics and government

State Treasurer Bill Lockyer will try to borrow about $5 billion for a brief period later this month to prepare for a possible federal "disruption," his office said Thursday.

Lockyer had originally planned to borrow the same amount of money later this year in order to ensure California has enough cash to pay its bills. But his office believes that absent a federal deal to raise the debt ceiling, the state could suffer from a "cash flow disruption and market turmoil" that would leave it unable to cover all operating costs.

To preempt such a problem, the treasurer will sell about $5 billion in short-term notes to private investors on July 26, using that money as a bridge to a separate $5 billion borrowing later this year. If federal officials reach a deal on the debt ceiling by July 26, Lockyer can avoid the bridge loan.

California borrows billions each fiscal year to pay its bills until the bulk of tax payments flow to the state in big collection months like April.

Lockyer relied on a $6.7 billion interim loan last October to help manage California's cash needs. In that deal, J.P. Morgan and Goldman Sachs accounted for nearly 70 percent of the funding, earning a 1.4 percent interest rate.



FOLLOW US ON FACEBOOK

More Capitol Alert

Capitol Alert on Twitter

Popular Categories

Now on sacbee.com/politics

Categories


November 2013

Sun Mon Tue Wed Thu Fri Sat
          1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30

Monthly Archives


Latest California Clips