Bloomberg reports that Goldman Sachs Group Inc. and Wells Fargo & Co. led a syndicate of eight banks and investors who won the bidding to loan California $5.4 billion before any credit- market disruption should the U.S. default on its debt.
Citigroup Inc., Barclays Plc, JPMorgan Chase & Co., Bank of America Merrill Lynch, Morgan Stanley and US Bank also will participate, Treasurer Bill Lockyer said yesterday in a statement. The state will pay 0.237 percent, or about a third of the rate on comparable debt. The loan matures by Nov. 22.
Lockyer is rushing to borrow before an Aug. 2 deadline for President Barack Obama and Congress to reach a deal that would raise the U.S. debt ceiling and avert a default. Missing the deadline may cost the government its top-ranked credit rating, upend financial markets and send interest rates higher.
“California had to obtain this interim financing to protect the state from the immediate, drastic consequences of a failure by Washington to resolve the debt ceiling impasse,” Lockyer said in the statement.
http://www.businessweek.com/news/2011-07-27/california-taps-banks-including-goldman-for-5-4-billion-loan.html
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