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California Avoids Cash Crisis - For Now

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Oct 16, 2008 2:23 pm US/Pacific

California Avoids Cash Crisis - For Now

SACRAMENTO (AP) ― State Treasurer Bill Lockyer says California has raised enough money to avert an immediate cash crisis.

Lockyer on Thursday announced the state had sold $5 billion in short-term notes that will be used to keep education, health care and other state services running.

Lockyer initially offered to raise $4 billion but increased the offering twice when individual and institutional investors responded well. The state will pay between 3.75 percent and 4.25 percent interest rate on the notes.

California still needs another $2 billion to keep the state cash flow positive. Lockyer says he'll return to the market at a later date.

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