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California Avoids Cash Crisis By Selling $5 Billion Short-Term Notes

State Treasurer Bill Lockyer says California has raised enough money to avert an immediate cash crisis. Lockyer today announced the state had sold $5 billion in short-term notes that will be used to k

California Avoids Cash Crisis By Selling $5 Billion Short-Term Notes

State Treasurer Bill Lockyer says California has raised enough money to avert an immediate cash crisis.  Lockyer today 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.  He says he's heartened by the response from individual and institutional investors.

Lockyer: It's impoosible to forecast what will happen next week or later on but certainly the trend is good.  Two weeks ago we were worried whether we could invest at all."

Lockyer initially offered to raise $4 billion but increased theoffering 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 later.