July 2, 2007 — A few months after receiving authorization from the Public Services Commission, the V.I. Water and Power Authority has closed on a $57.5 million bond issuance that will, among other things, help to cover the cost of a new heat-recovery boiler on St. Croix.
The authority successfully sealed the deal on June 28 and will be able to draw down on the funds immediately, according to a WAPA news release. In addition to the boiler project, bond proceeds will also pay for repairs to the authority's plant and substation on St. Thomas, debt-service requirements on the bonds and a $10 million line of credit WAPA has used to subsidize other expenses.
Bond proceeds plus interest earnings on the bonds are expected to total $58.5 million, the release says.
The bond issuance is part of larger $97 million funding package that will also allow WAPA to refinance a portion of its 1998 series bonds — some $40 million — at a lower interest rate. While the package was approved by the authority's governing board in May, WAPA's bond counsel and financial advisors have since recommended that the bonds be refinanced at a later date, as interest rates have recently increased and are not expected to yield the previously anticipated amount of savings. (See "WAPA Works Around Funding Problems for Boiler, Other Projects.")
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