Mattiello says state should pay 38 Studios bonds

Nicholas Mattiello

Rhode Island's House speaker has joined the ranks of those who say the state should repay bonds that financed the 38 Studios deal, despite calls from some lawmakers to default.

Speaker Nicholas Mattiello announced his decision Thursday after caucusing with fellow Democrats. He says the state must pay the bonds to protect its credit rating.

"I believe it's in the best interests of the state to pay the 38 Studios bonds. It will mitigate our losses. We know what our appropriation will be. The reputation of the state will not be harmed any further. Right now, there's only one state in the history of the United States that has defaulted. That's Arkansas in the 1930s. They're still on the default list, and I'm not going to put Rhode Island on a default list," Mattiello said.

On Wednesday, Mattiello met in New York City with two bond rating agencies. Both Moody's and Standard & Poor's have warned of downgrades if the state defaulted, which would increase borrowing costs.

Mattiello says he has overwhelming support from fellow Democrats.

Rhode Island is responsible for some $87 million under the deal that gave 38 Studios a $75 million state-guaranteed loan. The company founded by ex-Red Sox pitcher Curt Schilling went bankrupt.