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CPA to seek seaport bond rating anew
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Posted on Jan 12 2000
Commonwealth Ports Authority Executive Director Carlos H. Salas left yesterday for San Francisco, California to meet with two international agencies in connection with the $33 million seaport bond rating.
Mr. Salas was accompanied by CPA board member and finance committee chair Roman Tudela and consultant Rex Palacios.
Fitch IBCA and Standard and Poor’s earlier failed to give any rating to the seaport bond. But Fitch gave the $20 million airport bond a Triple BBB minus rating.
CPA has been eyeing for the bond rating which is expected to boost the credibility of the ports authority and the Commonwealth in the financial community. It will also reduce the interest rate from the current 6.85 to 6.6 percent.
CPA hopes to get the seaport bond rating between now and March 2000, but talks about the possible pullout of the garment industry have affected efforts to get it rated.
A seaport study earlier conducted by Booz, Allen and Hamilton revealed that the removal of the garment industry in the Northern Marianas would cripple seaport operation since it is the main source of its revenue. Saipan Harbor is heavily dependent on the garment industry since it is the only significant export of the CNMI. In
1997, the garment industry’s total revenue topped $800 million.
While the CNMI currently enjoys huge revenue from garment factories, the study noted that the long-term future of the industry, however, remains uncertain as a result of international trade agreements and potential legislation.
The ports authority has already carried out a 30 percent increase in seaport rates, wharfage fee, port entry fee in July 1999.
A huge amount of $33 million bond float was used to complete the $43 million Saipan Harbor Improvement Project. Aside from having a 2,600 linear feet of berthing space and a 22-acre container yard, the harbor now is minus 40 ft. deep. In addition, the channel, turning basin and berthing area have been expanded to accommodate a large number and a variety of vessels.
