[Robert357]

OK so the State is days away from announcing the Power Bonds and their ratings. This should be some interesting days and some interesting politicing!

I love the last paragraph of the article that slams the Legislature! I however, wonder what kind of market reception there will be to these bonds and how they will be backed, especially since the Bankruptcy hearings are not finalized yet (unless a fix is in with the Judge?)

[Robert357]

I found this article in Rough & Tumble and thought that now that we have an update on the Power Bonds, you would like to know about it.

[balrog666]

It's crucial for California to get the money as soon as possible, Connell said. The state owes $1.5 billion next month on money it borrowed to fill the bite the energy crisis took out of the general fund, then $3 billion more in November and January respectively.

Borrowing money to make interest payments on past borrowing.
Now why does that sound soooooooooooooo bad?
Oh, yeah, that's what third world nations do at the IMF and World Bank.

[Dog Gone]

agreed the bonds' complexity has contributed to the delay, as well as a monthslong debate over whom should be paid first with rate money.

I don't believe I ever heard how that debate was resolved. If the bondholders aren't the first in line to be paid, I would NEVER buy these bonds. California is NOT guaranteeing their repayment, and Gray Davis would love to hose out of state investors.

The reason I'm still concerned this is a real possibility is because of the statement in the article saying that these bonds have a high yield. Why would that be? Interest rates are low. Could it be because they are risky to buy?