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"Will pay cash for California/IOUs" readse one Daly City posting on the onlineclassifiesd service. "I pay $$$ for Californis registered warrants - $9999," reads another. The Financial Timesw also reportsthat Second-Market, a company that specializes in tradinv illiquid assets such as private company stoc k and bankruptcy claims, is getting ready for a piecw of the action. "We have a wholse team working on it," it quotes the firm's CEO, Barry Silbert, as saying. Wall Stree hedge funds, municipal bond investorz and other institutions are all expectex to be interested in the as well, which have a 3.75 percentt interest rate that matures on Oct. 2.
State Controllet John Chiang has said he plans to issuenearly $3.4 billio in IOUs. After hedging most of last a number of bankincluding , , , , , and all said they will take the state'z promissory notes, but only until July 10. Palo Alto-basec has also said it would honorthe IOUs. The IOUs becamw necessary after the California Legislature failed to remedy a $24.3 billion deficit by the end of the fiscal year. By not resolvinhg the issue by the end of thefiscal year, the budgetr hole automatically grew to $26.e billion, state finance officials say.
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