ROCKY MOUNT - With international credit markets freezing up and the cost of borrowing soaring, it might not seem the best time to seek a $100 million loan.

But the Golden LEAF Foundation is doing just that.

It committed the funds in May to the Global TransPark Authority in Kinston to help lure Spirit Aerosystems to the state-funded business park. The TransPark is building a factory for Spirit, which makes plane parts, as part of an incentives agreement to bring more than 1,000 jobs to Eastern North Carolina.

The foundation, based in Rocky Mount, has more than enough money. It manages half of North Carolina's proceeds -- public funds -- from a national settlement with tobacco manufacturers over state health costs. The foundation has more than $700 million in assets.

But that money is tied up in stocks, bonds and the like. Unwinding the investments to get the cash could hurt the allocation strategy and investment return.

So Golden LEAF opted to borrow. "It's more of a convenience issue," said Dan Gerlach, a former adviser to Gov. Mike Easley who took over as foundation president this week. Spirit wants "to go and start digging dirt today" to get the new operation under way. State leaders, too, are eager to have the factory built so the company can start hiring.

Gerlach said the foundation has received several bank proposals for the financing, and he expects more. So far, he hasn't seen a big effect of the credit crunch.

That's probably because Golden LEAF has so much to put up as collateral, which makes banks more willing to consider the loan.

"I don't think money is unavailable, but clearly it has become more conservative," said Robert Bushman, an accounting professor at UNC-Chapel Hill's Kenan-Flagler Business School. "This would probably be a pretty conservative loan."

What's more, Gerlach said the foundation likely could pay it back within a year.

If credit conditions worsen, the foundation might have to pay a higher interest rate or have to contend with other restrictions to get the money.

On Thursday, the London interbank offered rate, or LIBOR, that banks charge each other for lending money climbed 6 basis points to the highest level since Jan. 11. With banks cautious even with one another, analysts say it will be even harder for private enterprises and individuals to borrow.

Even if Golden LEAF pays more in interest, the cost likely will be a wash, Bushman said.

"You pay the cost one way or the other, either through interest or lost return on the [investment] strategy" if it is disrupted to get the cash, he said.

The Golden LEAF Foundation board has authorized Gerlach to handle details of the loan.

He expects to make a decision on a proposal "very soon."

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