Kentucky Gov. Steve Beshear is proposing as part of his fiscal 2011 budget to refinance as much as $500 million of internal state loans originally used to pay medical benefits of the Kentucky Teacher Retirement Systems.

Each current loan is amortized over 10 years at 7.5% and repaid annually from the general fund by approval of the General Assembly. The remaining average life of the loans is around 4.8 years but the state is not planning to extend maturities.

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