California issuing IOU's
California State Controller John Chiang started issuing IOUs on behalf of the state on July 2 to conserve cash while lawmakers and Government.
Arnold Schwarzenegger try to close a multibillion dollar budget gap.
Also called registered warrants, the IOUs pay an interest rate of 3.75 percent and can be redeemed on Oct. 2 or earlier — whenever state officials reach a budget deal. Because the California IOU notes are considered as securities by the U.S. Securities and Exchange Commission, anyone wishing to pay Sonnet with an IOU must additionally present a notarized bill of sale.
