PSS bond proceeds out in 30 days
The Public School System will receive the proceeds from the $16 million bond flotation at least a month from now which will pave the way for construction of various school projects, according to Tim Thornburgh, PSS federal coordinator.
Financial advisor is California Financial Services while the bond underwriter is PaineWebber.
Also, Financial Security Assurance, Inc., gave a triple A rating to the bond. The highest investment rating was given by the insurance firm after examining the 10-year record of the CNMI which showed continuous economic growth.
Payment of the $16 million debt will come from local fuel tax revenue. Based on the law which provided for the bond flotation, the Secretary of Finance will transfer some $2 million from the fuel tax revenue to a special account each fiscal year to guarantee repayment of debt.
The $16 million loan will be used to match funding for Capital Improvement Projects of PSS under a seven-year plan which shall include the establishment of a new high school and a junior high school on Saipan.
One of the provisions in the bond flotation was it required PSS to complete all the projects within the five-year period. PSS has been working on a schedule to finish all the projects to be financed by the loan within the next two years.
Representatives from the insurance firm and the bond underwriter will arrive here for the signing of the bond documents. The interest rate will depend on the prevailing market rate which is between 3.2 to 3.9 percent.
