Savings on New Bond Sale Is Good News for Two St. Croix Projects

Sept. 28, 2006 – The Public Finance Authority announced Thursday afternoon a $219 million bond sale, refinancing portions of the territory's 1999 gross receipts tax (GRT) bond. The refinancing of the bonds, conducted in New York, realized interest savings of $21 million to the territory.
Kent Bernier, PFA director of administration, said, "The $21 million savings will cover $9 million for the St. Thomas Regional Library and Records Center, and about $5 million for the Gallows Bay and the Annaly Bay projects on St. Croix."
The refinancing brought in $6 million more than the government had estimated earlier this month, when a Government House release said the bonds were expected to generate an "additional savings of $15 million." (See "Government Receives Bond Rating from Standard and Poor's").
As a result of the territory receiving the improved investment-grade credit rating by both Moody's Investors Service and Standard & Poor's, the cost of the insurance needed to secure the bonds went down significantly, providing the extra $6 million savings.
UBS Securities underwrote the bonds. Banc of America Securities acted as financial advisor to the government, and the law firm of Buchanan Ingersoll and Rooney was the bond counsel.
Gov. Charles W. Turnbull, who was in Washington, D.C., in a release Thursday said, "We have benefited by savings millions of dollars in refinancing the GRT bonds…. We will now look toward addressing the unfunded liabilities in the pension fund and continue fiscal discipline and financial reporting."
PFA spokesperson Lonnie Soury said Thursday, "This is a big deal. In 1999, the V.I. was near bankruptcy. The government owed $131 million in tax refunds, alone. The governor, through his team, worked diligently to get the investment-grade bond ratings for the first time in V.I. history."
Bernier was equally pleased. "In 1999, when we first sold the gross receipts tax bonds, we were unable to purchase insurance that would provide for an AAA rating," he said. "Because of the economic turnaround, we are able to go into the financial markets with an investment-grade rating and secure financing at the best possible interest rates, thus saving the territory millions of dollars that, in turn, can be used to improve our standard of living."
Bernier said he was especially pleased to support the library project "with [DPNR deputy commissioner] Claudette Lewis at the helm."
Lewis, who was attending a meeting at the PFA office, said, "I couldn't have done it without Robert Moron. He has worked for the department for almost 40 years, and he was by my side every step of the way." Moron is the DPNR chief records manager.
A group of principals for the library project meet weekly or biweekly at the PFA office to confer on its progress. "We're moving earth," said Winston Adams, the PFA representative for the meetings. Also gathered around a table discussing the project was John Woods, project architect; Jeffrey Boschulte, consulting design studio associate architect; and Craig Farley, project manager for Roy's Construction.
Woods said they plan to stay ahead of the game. "Let people know we are here each week," he said. " We meet to expedite the process, discuss all issues, make sure we are on track."
The $11.3 million, 57,000-square-foot library center is a public-private partnership between the government and Tutu Park Mall. The PFA passed the $9 million bond issuance in June and Tutu Park Mall will contribute $2.3 million.
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