Legislation to authorize refinancing of ’93 GO bonds, save $3.2M
FOR IMMEDIATE RELEASE
October 12, 2012
Senator Sam Mabini authored legislation that will save an estimated $3.2 million in debt service and use it to pay tax refunds, to avert a UOG tuition increase, and to start a research project at the UOG School of Education. Sen. Aline Yamashita co-authored the bill. This is the legislation Governor Calvo last week said he was working on with Sen. Mabini following the successful sale of the GPA refinancing.
The bill authorizes the refinancing of the 1993 General Obligation bonds. Market conditions are ripe for this refinancing with lower interest rates. The Governor’s Office believes that with the good rates available for bonds right now, refinancing this existing debt will save taxpayers $3.2 million. The debt will not be extended out.
A separate section of the bill also allows Guam Waterworks Authority to use money currently in the bank to purchase a water booster pump so water can flow at the Gill Breeze subdivision.
The senators hope the Rules Committee will make an immediate referral, and that the committee it is referred to quickly holds a public hearing so the measure can be placed on session agenda as soon as possible.
The difference between this bill and the legislation Speaker Won Pat introduced is the pledge of funds. The Speaker’s bill pledges the refinancing against the General Fund, which has a non-investment grade rating, ‘B+ with a stable outlook.’ Sens. Mabini and Yamashita’s bill makes the pledge against the BPT, which has an ‘A with a stable outlook’ investment grade rating. This means the Mabini-Yamashita Refinancing Proposal will yield the lowest interest rate possible, producing savings far better than the Speaker’s proposal would. Speaker Won Pat’s proposal would save only an estimated $900,000.
The other distinction is the pledge of the monies saved. While the Speaker, Mabini, and Yamashita agree to use proceeds for UOG and tax refunds, the Mabini-Yamashita Refinancing Proposal pledges far more money with far more savings. The Mabini-Yamashita Refinancing Proposal will use the savings to pay tax refunds, invest $500,000 to support research at the School of Education at UOG, and provide $1 million to UOG operations to help avert a tuition increase. This leaves an estimated $1.7 million for tax refunds.
Please call Natalie Quinata at 488-6013 or Phillip Leon Guerrero at 929-7467 for more information.
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