Panel hears more testimony on 38 Studios default

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News,Business,Video Games,Rhode Island

PROVIDENCE, R.I. (AP) — The House Oversight Committee has heard more testimony on whether Rhode Island should repay the 38 Studios bonds.

University of Rhode Island economist Leonard Lardaro said Thursday default would hurt the state's already negative image and be like taping a "Kick me" sign on its back.

The Institute for Public Leadership's Gary Sasse called an outside report predicting the state's ratings would sink to junk bond status a good starting point but said its conclusions need more analysis.

Wealth manager Robert Cusack urged the House speaker to meet with the ratings agencies about the impact of a default on general obligation bond ratings. He says bond buyers should also be interviewed.

The state remains responsible for $87 million under the failed deal that gave 38 Studios a $75 million state-backed loan.

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