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Monday, March 27, 2023
HomeNewsArchivesPFA Closes on $49.6 Million Bond Sale

PFA Closes on $49.6 Million Bond Sale

Public Finance Authority officials announced Monday that the agency had closed on its sale of $49.6 million in gross receipts tax bonds meant to help pay outstanding utility bills and cover current year government expenditures.

According to a news release from Government House, the tax exempt bonds were sold at a true interest cost of 4.04 percent for the 20-year bond issue. The yields on the bonds ranged from 0.95 percent to 4.10 percent, and at the long end sold at a spread of 125 basis point (1.25 percent) to triple-A rated bonds.

The bonds were sold to mutual fund companies and asset managers that have become active purchasers of V.I. bonds, the release said.

“This was a good time to be in the market, and with the continuing strong demand for our bonds, we will continue to pursue opportunities to fund those investments approved by the Legislature, and perhaps take advantage of further refunding opportunities to reduce our debt service costs in the years ahead,” said Finance Commissioner Angel Dawson, who also serves as executive director of the Public Finance Authority.

The bonds will cover:

– $11 million for the Gov. Juan F. Luis Hospital’s payroll from July to September;
– $5.25 million for JFL’s WAPA bills;
– $1 million for the upgrade of electronic records at the St. Croix hospital;
– $7 million for the Schneider Regional Medical Center;
– $5.25 million for Schneider’s WAPA bills;
– $3.5 million for SRMC capital improvements;
– $1.5 million for outstanding debts for Sea View Nursing Home;
– and $1.5 million for the Bureau of Corrections’ outstanding WAPA bills.

Dawson said in the release that, while these needs are critical, the bonds will only “make a very small contribution toward” the $74 million budget deficit that remains for the current fiscal year and will have “no impact” on the challenges in putting together a balanced FY15 budget.

Gov. John deJongh Jr., who serves as PFA board chairman, said that given the “strong demand” from bond investors, the government will also be working with the Senate to get approval for additional money for the V.I. Waste Management Authority.

“The U.S. Department of Justice is insisting that we fund our landfill closure obligations, which is better for us than to incur the penalties they have notified us they intend to impose, and it certainly would be better to do it at the low cost of funds that is now available,” the governor explained.

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