PROVIDENCE, R.I. (WPRI) — Rhode Island’s state government has secured a second $150 million line of credit to ensure it has enough cash to keep operating now that income tax payments have been delayed until July due to the coronavirus pandemic.
Evan England, a spokesperson for General Treasurer Seth Magaziner, said the new line of credit was obtained from Santander Bank. It has a floating interest rate that is 79% of a combination of LIBOR — the London Inter-bank Offered Rate, a widely used rate in financial markets — plus 130 basis points. The rate was 1.67% as of Tuesday, he said.
The state has withdrawn $10 million so far from the line of credit, which matures in a year.
Magaziner’s office previously secured a $150 million line of credit from Bank of America on similar terms. Only $25 million has been drawn off that account so far, England said.
Four top General Assembly Democrats, meeting last month as the obscure Disaster Emergency Funding Board, authorized up to $300 million in short-term borrowing due to concern the state would soon run short of cash. Republicans have criticized the unusual move and suggested Assembly leaders should be formalizing plans to reconvene rank-and-file lawmakers.
Ted Nesi (email@example.com) is WPRI 12’s politics and business editor and a Target 12 investigative reporter. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook