Investors Chip In $5.4B To Cover California If US Defaults
LOS ANGELES (CBS) — The state of California on Tuesday sought to secure a short-term bridge loan of $5 billion from private investors in the event of a possible default by the U.S. federal government.
State Treasurer Bill Lockyer told KNX 1070's Ron Kilgore that despite the state's gloomy economic outlook, there were no shortage of investors.
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"The rate for an investor is .237 percent," said Lockyer. "Now, that's very low compared to what we paid a year ago where we were out for a little longer period of note at 1.4 percent then."
A select group of banks, credit union and other investors promised a total of $5.4 billion, according to Lockyer.
The auction comes as the looks to get funding in place to avoid a cash crunch in the event the U.S. fails to increase its debt limit.
And even if Congress and the White House do get a deal into place, the funds could offset any federal aid lost to proposed state budget cuts.
