Lockyer said he planned to test the market's appetite for buying California debt during the week of Oct. 13. He'll offer as much as $7 billion in notes in a sale managed by Banc of America and Goldman, Sachs & Co.
"Hopefully, the enactment of the economic recovery plan will end the paralysis in credit markets," he said. "But there are no guarantees the legislation will produce the market conditions that will permit completion of a RAN deal at the best price for taxpayers."
But if the sale isn't successful, Schwarzenegger said, he was ready "to go to the federal government and ask for help."
Financial experts said it was unclear whether the state would have any takers when it went to market in nine days.
Lewis Feldman, an attorney who has advised the state and local governments on billions of dollars of bond deals, warned that the easing of the credit market is "not going to happen as quickly as a fireman's clothing change. It is going to take longer."
Friday's bailout package contains specific wording that authorizes the Treasury to consider "the need to ensure stability" for public agencies, such as counties and cities, that are faced with significant increases in borrowing costs.
That kind of assistance, it is hoped, will not be needed, said House Financial Services Committee Chairman Barney Frank (D-Mass.) early Friday. Frank said he opposed a loan to California because it could lead to other states asking for federal money.
And if the federal government doesn't come through for California, if needed, Lockyer is prepared to ask the state's two giant pension funds for help.
Lockyer spokesman Tom Dresslar said the treasurer was planning to talk to the California Public Employees' Retirement System and the State Teachers' Retirement System. He wants them to consider buying some of California's debt or giving the state special guarantees to boost the creditworthiness of its securities.
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marc.lifsher@latimes.com
evan.halper@latimes.com
