RI obtains $150M line of credit from Bank of America

Politics - Government

PROVIDENCE, R.I. (WPRI) — Rhode Island’s state government has secured a $150 million line of credit from Bank of America to tide it over with 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 line of credit comes with a floating interest rate that is 80% of LIBOR — the London Inter-bank Offered Rate, which is widely used rate in financial markets — plus 50 basis points. The rate is currently 1.25%, he said.

The state has withdrawn $25 million so far from the line of credit, which matures July 30, or 15 days after the new tax deadline.

Four top General Assembly Democrats, meeting as the obscure Disaster Emergency Funding Board, met last Thursday and 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.

England said the treasurer’s office is looking to obtain another line of credit from at least one additional bank.

Ted Nesi (tnesi@wpri.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

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