The release below has much more information and detail.
(New York) The Guam Waterworks Authority (GWA) opened up for sale its 2014 Series A and Series B bonds today in New York, NY. Almost immediately the $85 million issue was oversubscribed with several firms each placing orders for over $30 million.
Of note, several firms that had not previously invested in any Guam credit entered into the bidding for GWA’s bonds, which are being issued to refinance for savings its 2005 bonds. Market interest was so strong and diverse that within 30 minutes the bond sale had orders 10 times the amount of bonds available for purchase.
In light of the recent woes in Puerto Rico, Governor Calvo instructed his Fiscal Team to work diligently with GWA to proactively seek out investors and advocate GWA’s tremendous fiscal and operational improvements, which led to a strong A- rating by Standard and Poor’s late last year. According to Governor Calvo, “the turnaround within GWA is not unlike that of the government of Guam as a whole under my Administration. I am excited that our marketing efforts have proven highly successful for GWA and for its ratepayers.”
The strong investor interest in Guam bonds resulted in lower yields on the 2014 bonds compared to the yields for GWA’s bonds sold in November 2013. This tighter spread to the MMD scale (the benchmark rates for which AAA rated credits are sold) is reflective of the government of Guam’s increased transparency and signifies just how important constant investor and rating agency relations have benefitted Guam under the Calvo-Tenorio Administration. Initial net present value savings were in the $7 million range when GWA sought approval from the Public Utilities Commission, but after the concerted marketing effort, including several glowing reports about Guam in the prestigious Bloomberg financial magazine, the overwhelming investor interest helped to drive interest rates lower and ultimately resulted in net present value savings of approximately $8.3 million.
According to Governor Calvo, “The savings are particularly helpful in reducing debt service in years where it will benefit ratepayers most and also by reducing the final year’s debt service by almost a full year. These are tremendous accomplishments and I congratulate GWA and my entire Fiscal Team for bringing such relief to the ratepayers of Guam.”
End of Release