SAN FRANCISCO - California got good news from Wall Street yesterday: JPMorgan agreed to lend the state $1.5 billion to pay off IOUs issued during a cash-flow crisis this summer, and Standard & Poor's removed the state's bonds from CreditWatch.

Neither JPMorgan nor a spokesman for California Treasurer Bill Lockyer would release the precise terms of the loan yesterday, but both sides confirmed that the deal had been reached. The biggest U.S. state needs to borrow $10.5 billion to meet its cash-flow needs this year, but it first plans to pay off registered warrants issued during the budget crisis.

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