TRENTON -- The New Jersey Economic Development Authority said yesterday it has found a partial solution of the credit crunch facing the state's small businesses: a pooled loan program that has won the backing of a triple-A rated bank.

"We believe this arrangement is the first of its type in the nation and will serve as a model for other states," Gov. Jim Florio said at the news conference where the program was announced. "We have created a new way for small and medium-sized businesses to raise capital as if they were Fortune 100 companies."

To get the program off its feet, the authority plans to come to market early next month with a $50 million mix of taxable and tax-exempt bonds backed by a letter of credit from Banque Nationale de Paris.

Another $100 million will be sold annually, explained Richard L. Tauber, a principal at Langdon P. Cook & Co., the sole underwriter. Mr. Tauber said he expects the first piece to be priced the week of Dec. 9.

In traditional deals, the economic development authority either lends money to businesses directly or guarantees the debt to convince local banks to make the loan.

This plan is different in that the authority has agreed to put some of its own capital at risk, enabling Banque Nationale to feel comfortable issuing its letter of credit, according to Anthony R. Coscia, executive director of the authority.

"This is unique because we're creating a structure where we're combining resources from our balance sheed to create a triple-A credit," Mr. Coscia said.

The guarantee is on a 30% first-loss basis, meaning the authority will be responsible for the first 30% of losses that arise.

The backing from the bank will allow the authority to charge extremely attractive rates on the loans, which will be split into taxable and tax-exempt portions depending on the purpose. Mr. Coscia said he expects the tax-exempt bonds to sell in the low- to mid-6% range, given the triple-A backing.

About 20 institutions, including manufacturing companies and qualified nonprofit organization such as elementary and secondary schools, will take part, state officials said.

Gov. Florio said the program is expected to generate about 600 new permanent jobs in the state and 570 construction jobs.

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