Something Borrowed

California Gets $1.5B Loan

First the Feds scratched Wall Street's back, now Wall Street's scratching California. J.P. Morgan, which repayed $25 billion in TARP funds only two months ago, is helping bailing out the state of California. A $1.5 billion loan from the bank will allow California to end its IOU program a month ahead of schedule. What J.P. Morgan will earn on the loan has not yet been determined; there is virtually no risk for the firm, because the loan will be repaid by late September when the state sells $10.5 billion in revenue anticipation notes. The Los Angeles Times' Tom Petruno notes that the transaction 's payoff isn't just monetary: "The deal is a way to get back into the good graces of a state that always has plenty of fee-generating financing needs."