Rhode Island debt payment, budget before governor

June 28 Fri Jun 28, 2013 6:07pm EDT

Related Topics

June 28 (Reuters) - Rhode Island Governor Lincoln Chafee is expected to approve a $2.5 million debt service payment on bonds used to lure former Boston Red Sox pitcher Curt Schilling's now bankrupt videogame company to the state.

However the payment is part of the $8.2 billion budget for fiscal 2014, which Chafee is still reviewing, his office said on Friday. He has seven days to sign it.

The state legislature sent its spending plan to Chafee on Thursday. The inclusion of the $2.5 million payment ends a controversial debate on the state's willingness to pay its debt. Some lawmakers sought to block the payment for the company, called 38 Studios, but their efforts to strip that money from the final budget bill failed.

The governor has said he supports making the payment. The interest payment, which is due in May, is on $75 million of taxable bonds that the state sold in 2010 to make a loan to 38 Studios.

The company's loan payments were originally supposed to secure the bonds. Now the state could wind up paying $89 million for them, according to its director of administration, Richard Licht.

Moody's Investors Service earlier in June downgraded by two notches its rating on the 38 Studios bonds and put $2.1 billion of Rhode Island's debt under review for possible downgrade.

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
Ctoons wrote:
Nice of the state to decide to pay the interest on their bonds.

Jun 29, 2013 1:16am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.