Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Aid plan helps Pa. capital avoid default

By Aaron Smith, staff writer

NEW YORK (CNNMoney.com) -- The state of Pennsylvania is helping the beleaguered capital city of Harrisburg stave off default with a multi-million dollar cash injection, temporarily postponing the specter of bankruptcy.

Gov. Edward Rendell said Sunday he would provide $4.3 million to Harrisburg. This includes expedited payments of $1 million in fire protection and $2.6 million for an annual payment to the municipal pension assistance fund.

It also includes $850,000 to hire a financial management firm, Scott Balice Strategies, "to develop a comprehensive plan for the city's financial stability and a $500,000 loan "to be repaid when the city's financial situation improves," according to a press release from the governor.

Without this assistance, the cash-strapped city was in danger of defaulting on its $3.29 million payment to bondholders on Wednesday. The city had issued those bonds to build a trash plant.

In May, Moody's knocked the city's rating on its general-obligation bonds three notched down to "B2," five steps below investment grade. To top of page

Index Last Change % Change
Dow 17,888.35 168.43 0.95%
Nasdaq 5,156.31 47.64 0.93%
S&P 500 2,102.63 22.22 1.07%
Treasuries 2.16 -0.06 -2.84%
Data as of 9:05pm ET
Company Price Change % Change
Bank of America Corp... 17.81 0.38 2.18%
General Electric Co 30.17 0.23 0.77%
Pfizer Inc 33.62 0.85 2.59%
Microsoft Corp 55.22 0.87 1.60%
Apple Inc 117.34 -0.96 -0.81%
Data as of 4:02pm ET


Cyber Monday saw an increase in the number of out-of-stock items this year, according to data from Adobe. More

Strong November U.S. car sales has industry poised to set a record for sales once December results are reported. More

Hive, a startup funded by the UN, is tasked with getting more Americans engaged with the refugee crisis. More

Have you heard of Harvey Mudd College? A degree from this small liberal arts school can cost more than a house, but grads earn about $92,300 a year after getting their degree. Google hired 11 Mudders last year. More