As we reported earlier today, state Sen. Dean Florez, D-Shafter, sent this letter to Treasurer Bill Lockyer, suggesting that CalPERS should invest in California's debt, since the nation's credit markets have dried up.
We forwarded the letter to CalPERS spokeswoman Pat Macht for comment. Her e-mailed response:
Hi Jon --
Checked around regarding the RANs and the possibility of CalPERS being a part of that.
First, we would not be surprised to be on the list of potential investors candidates to be approached by the bank or agent representing the RAN issuer, and of course, we are always interested in potential investments that will provide us with a risk adjusted rate of return. So, if we are approached, our investment staff would do their normal due diligence and make an objective evaluation of its merits, including returns as well as how it would fit within our own asset allocation ranges and targets which guide our investment selections. (However, if you are asking if there are legal impediments to investing in a RAN, the answer is no.)
Questions: Can you see any pitfalls with this plan? What if CalPERS were to decline after doing its due diligence?
The Author
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