JPMorgan Chase & Co. will lend California $1.5 billion so the state can end its IOU program a month earlier than planned, the Los Angeles Times reported Tuesday, citing the state treasurer's office.
The state had been searching for a lender to provide $1.5 billion in the form of a short-term loan to conclude the IOU program.
"JPMorgan was the first to come back with a proposal worth considering," said Tom Dresslar, spokesman for state Treasurer Bill Lockyer. Terms on the loan are still being negotiated, Dresslar said.
The bank is to be repaid by late September when the state is scheduled to sell $10.5 billion in revenue anticipation notes. The loan package is scheduled to go before the state's Pooled Money Investment Board Friday.
The state began issuing the IOUs July 2 to pay business vendors and other creditors. They were supposed to mature Oct. 2.