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TMFEditorsDesk (< 20)

California's about to hit the fan

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10

July 08, 2009 – Comments (3) | RELATED TICKERS: BAC , JPM , WFC

From Calculated Risk:

 

A group of the biggest U.S. banks said they would stop accepting California's IOUs on Friday ... if California continues to issue the IOUs, creditors will be forced to hold on to them until they mature on Oct. 2, or find other banks to honor them.
...
The group of banks included Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and J.P. Morgan Chase & Co., among others.
I guess the banks don't think the 3.75% annual interest rate is worth the risk for a "BBB" rated debtor on the Rating Watch Negative list.

http://www.calculatedriskblog.com/2009/07/banks-will-stop-accepting-california.html

 

JR

3 Comments – Post Your Own

#1) On July 08, 2009 at 11:01 AM, TMFEditorsDesk (< 20) wrote:

Green shoots (California in the wallet).

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#2) On July 08, 2009 at 11:01 AM, TMFEditorsDesk (< 20) wrote:

Oops...JR = Jim Royal.  First comment is Anand.

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#3) On July 08, 2009 at 11:03 AM, JeanDavid (78.31) wrote:

"if California continues to issue the IOUs, creditors will be forced to hold on to them until they mature on Oct. 2, or find other banks to honor them."

Iff California honors them in full on October 2, that is.

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