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 17,828.29 -23.22 -0.13%
Nasdaq 4,901.77 6.88 0.14%
S&P 500 2,090.10 -0.44 -0.02%
Treasuries 1.82 -0.05 -2.51%
Data as of 12:24am ET
Company Price Change % Change
Bank of America Corp... 14.70 -0.22 -1.47%
Apple Inc 100.41 0.79 0.79%
Chesapeake Energy Co... 4.23 -0.12 -2.76%
Freeport-McMoRan Inc... 11.34 -0.31 -2.66%
HP Inc 13.04 0.84 6.89%
Data as of May 26
Sponsors

Sections

Gawker conceded Thursday that it has hired bankers to advise them on a possible sale as a "contingency" against multi-million dollars lawsuits filed against it. More

The overwhelming majority of young, wealthy millennials believe that impact investing is important to their decisions, according to a new survey. More

A lawsuit against Snapchat has been put on hold after the company said its app wasn't being used during a car crash. More

The Wall Street bank joins a growing number of employers that seek to provide employees with more qualitative, constructive and ongoing feedback. More