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Duke Energy extends $10 million credit line to Charlotte Convention

by: Oreo

Mon Mar 14, 2011 at 09:33:47 AM EDT


Duke Energy Corp., whose CEO is leading the fundraising for the Democratic National Convention, is guaranteeing a $10 million line of credit for the event.

The credit line from Fifth Third Bank is apparently the first time such an arrangement has been used by any Democratic convention organizers.

A Duke spokesman said stockholders, not ratepayers, would be on the line in the event of a default by the convention's host committee. But the head of the committee said it may never have to draw on the money.

"It is just security in the event of a cash shortfall," Will Miller, acting executive director of the Charlotte organizing committee, said Friday. "The host committee is obligated to pay it back, and the host committee will pay it back." - Charlotte Observer

And huge surprise... the GOP is whining about it

Calling the Charlotte event “a people’s convention,” the DNC is limiting all corporate and individual cash contributions to $100,000, but the Republican National Committee is framing the line of credit as a way to circumvent that rule.

“We said it then and we’ll say it again, this rule isn’t worth the paper it’s written on,” RNC spokeswoman Kirsten Kukowski said. “It proves the ‘policy’ was nothing more than a PR move from the very beginning.”

The DNC insists that the credit is not an improper contribution but rather “a standard business transaction,” spokesman Brad Woodhouse told POLITICO. “Duke Energy — which is part of the Charlotte 2012 Host Committee — is simply helping guarantee the loan.” - Politico

If this was a straight-out donation I could see their point but it's a line of credit... a loan.

Oreo :: Duke Energy extends $10 million credit line to Charlotte Convention

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Duke Energy (0.00 / 0)
also supports operation Migration, the effort to introduce a migrating whooping crane population in the East. operationmigration.org

it's a donation (4.00 / 1)
it's a donation roughly equal to risk of default * $10 million[let's be honest, if the convention goes bankrupt it'll be the whole $10 million].  A 1% risk of default would equate to a hundred thousand dollars.  Unless some other entity is guaranteeing the convention as well I'd have to think the risk is well in excess of 1%[after all if the risk was less than that why would the bank bother to require the guarantee].  How much was the bank willing to knock off the interest rate in exchange for the guarantee?  That would be a fairly tangible measure of the risk.  If they weren't willing to do the loan at all without the guarantee that suggests to me that the risk is north of 10%.  


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