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Louisiana to borrow up to $400M in short-term bank loans

7 years 1 week 5 days ago Thursday, September 15 2016 Sep 15, 2016 September 15, 2016 12:00 PM September 15, 2016 in News
Source: Associated Press
By: AP News

BATON ROUGE - Louisiana will borrow up to $400 million from two banks to help keep bill-paying on track at state agencies.

The Bond Commission agreed without objection Thursday to the short-term loans, which will be drawn down as needed and must be repaid by August 2017.

The state's financial adviser, Renee Boicourt with Lamont Financial Services Corp., estimates Louisiana will need to tap into $300 million of the loans by the end of October for cash flow across departments.

The loans, from U.S. Bank and J.P. Morgan, are likely to cost the state at least $1.3 million in interest and other fees - and up to $1.6 million.

After years of budget raids, Louisiana has fewer reserves from which to borrow while waiting for taxes and fees to arrive in the treasury.

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