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CPA officials confident Saipan harbor will be rated By ALDWIN R. FAJARDO
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Posted on Jan 25 2000
Counting on the continued growth of the CNMI garment manufacturing industry, Ports Authority officials are confident its seaport revenue bonds will get a rating from two San Francisco-based companies.
Members of the CPA delegation who flew to the mainland U.S. earlier this month for a presentation of the financial outlook for the Saipan seaport are optimistic their efforts will yield positive results.
Last year, ports authority officials failed to secure a rating for the CPA’s seaport division.
“They feel good about the presentation although the result won’t be out until late next month,” said CPA spokesperson Travis Coffman in an interview.
A study made for CPA by Booz Allen & Hamilton disclosed that the agency’s seaport revenues are expected to grow from $4 million during the fiscal year 1999 to over $5.6 million in 2002 largely because of the development in the garment sector.
The document also said that as tourism rebounds and garment production grows, the Ports Authority’s revenues in the harbor sector are expected to increase sharply through 2002, reaching $5.7 million.
This figure is nearly 25 percent higher than the FY 1998 tally of $4.3 million.
The same study has suggested that CPA raise its rates by 30 percent in fiscal year 2000 and fiscal year 2002, as well as reduce its personnel costs by 15 percent in FY 2000 and FY 2001 to mitigate the negative financial impact of the garment industry pullout in five years.
CPA Executive Director Carlos H. Salas previously stressed that the Ports Authority has a fair shot at securing bond rating for its seaport operations this time.
Once rated, CPA qualifies to get 20 basis points reduction in its bond interest rates, from 6.85 to 6.654, which translates to over $80,000 in total savings each year.
Last year, CPA received a BBB minus investment grade rating from Fitch IBCA for its more than $20 million airport revenue bonds sold in March 1999.
According to Fitch IBCA, the capital improvement program of CPA’s airport system does not include any additional revenue bond debt and that the system’s management team has yielded favorable financial operations in the past.
