http://online.wsj.com/article/SB10001424052702303627104576412172854764168.html
Is New Jersey the canary in Meredith Whitney's coalmine? According to the WSJ, New Jersey may be the first state to use the highly unconventional approach of using a commercial bank funded bridge loan as large as $2.25 billion to "plug a cash shortfall." The loan raised by Chris Christie's state, "would cover bills the state will need to pay as its new fiscal year begins July 1. Normally, states have some cash available as they finish one fiscal year and begin the next, while gearing up for a bond offering based on the new budget...Terms of the loan, also known as a credit line, haven't been finalized and negotiations could fall apart, according to the people familiar with the matter." And since this will likely be a benchmark loan whose term sheet will be promptly circulated to other cash-strapped states, it will be all the more important in defining such key term components as subordination, collateralization, and general interest rates.
http://www.zerohedge.com/article/broke-new-jersey-seeking-225-billion-bridge-loan-9-jpmorgan-emergency-funding
Is New Jersey the canary in Meredith Whitney's coalmine? According to the WSJ, New Jersey may be the first state to use the highly unconventional approach of using a commercial bank funded bridge loan as large as $2.25 billion to "plug a cash shortfall." The loan raised by Chris Christie's state, "would cover bills the state will need to pay as its new fiscal year begins July 1. Normally, states have some cash available as they finish one fiscal year and begin the next, while gearing up for a bond offering based on the new budget...Terms of the loan, also known as a credit line, haven't been finalized and negotiations could fall apart, according to the people familiar with the matter." And since this will likely be a benchmark loan whose term sheet will be promptly circulated to other cash-strapped states, it will be all the more important in defining such key term components as subordination, collateralization, and general interest rates.
http://www.zerohedge.com/article/broke-new-jersey-seeking-225-billion-bridge-loan-9-jpmorgan-emergency-funding
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