The Guam Waterworks Authority (GWA) successfully sold the Series 2016 Guam Waterworks Authority Water and Wastewater System Revenue Bonds valued at $143.3 million. The bond was sold at a low interest rate of 4.26% with demand exceeding available bonds 10 times over.
“The sale was a huge success for Guam and is a true testament to the financial strength and stability we have built over the last five years,” said Governor Eddie Baza Calvo. “We have been able to share the Guam story with Wall Street and with today’s numbers, they are pleased with our progress.”
Governor Calvo, members of his Fiscal team and GEDA joined the GWA and Consolidated Commission of Utilities (CCU) team in about 20 investor meetings and calls held prior to the bond pricing. The group addressed questions about GWA and Guam’s economic outlook.
“The market demand was very strong. We had more than 75 investors participating in today’s bond sale,” said Jay Rojas, acting Administrator for the Guam Economic Development Authority (GEDA). “Our relationship with municipal bond investors came into play today as over $1.4 billion in orders came through in less than an hour.”
Proceeds from the Series 2016 will be used to finance capital improvements to Guam’s water and wastewater system.
Over the past several years, the CCU and GWA Management have worked hard to improve fiscal and operational performance, control costs, and ensure compliance with the 2011 Court Order and existing environmental regulations.
“The CCU’s guidance and the hard work of the Guam Waterworks Authority team contributed significantly to positive credit evaluations for the bond sale and, in combination with the solid economic outlook for Guam, resulted in high demand and lower than anticipated interest rates,” said GWA General Manager Miguel C. Bordallo.
Guam investors were given the first priority in submitting orders Tuesday morning of which over $900,000 was placed for the GWA bonds.
Bond proceeds will be deposited with the bond trustee, Bank of Guam, when the bond closing occurs on Wednesday, February 24th.
The bond received three investment grade ratings: “A-” from S&P, “BBB-” from Fitch and “Baa2” from Moody’s.
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