CPA confident that $7.2M bonds will sell fast

The favorable credit assessment given by Fitch Ratings on the Commonwealth Ports Authority’s $7.2-million revenue bonds has given CPA confidence that the bonds would be sold immediately after hitting the market later this month.

CPA executive director Carlos Salas said he expects the sale of the bonds to be completed in one day. The sale is scheduled for Sept. 20, 2005.

“The ‘BBB-’ rating by Fitch provided confidence for bond buyers on the revenue bonds,” said Salas. He added that CPA’s bond underwriters—Altura, Nelson & Company Inc.—had already been in contact with potential buyers.

CPA is floating $7.2-million revenue bonds to raise money for the concrete paving and drainage improvements of the container yard and cargo off-loading and off-loading areas at the Port of Saipan.

After receiving a favorable credit rating from Fitch, CPA is now working on different requirements needed for the bond sale.

The Commonwealth Development Authority and the CPA both need to adopt a resolution affirming the bonds’ tax-exempt status. Provided by the Tax Equity and Fiscal Responsibility Act, such status would grant the bonds exemption from federal, state, and municipal taxes.

A public hearing on the container yard project and the bonds will be held on Sept. 14, 2005 at the CPA Conference Room at the Port of Saipan building. The hearing will start at 6pm.

Individuals wishing to express their views on the issuance of the bonds and the project are encouraged to attend the public hearing.

The project also needs the approval of the Governor’s Office and the Attorney General’s Office.

The ports authority plans to put the project out for bid in the early part of October. CPA also hopes to have a contract awarded to the winning bidder and construction to begin by the early part of 2006.

The project is expected to take eight months to be completed.

“This is a long-awaited project. It has not been a project that’s easy to finance, with the economic problems and the situation of the garment industry. But as Fitch has noted, CPA can sustain operations and continue to pay for this debt,” Salas said.

The $7.17 million bonds being floated by CPA will be used to finance proposed improvements at the Port of Saipan container yard, which includes the paving of the yard and building of a drainage system approved by the U.S. Environmental Protection Agency.

Saipan Stevedore Company Inc., the sole stevedore operator at the Port of Saipan, has committed to contributing $2 million to the repayment of the bonds by amendment of its lease agreement with CPA.