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CDA approves bond flotation for the CPA’s seaport paving project
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Posted on Jun 01 2005
The Commonwealth Ports Authority received yesterday the go-signal from the Commonwealth Development Authority to proceed with a plan to float $7.18 million in revenue bonds for the concrete paving of the Saipan seaport container yard.
The CDA board of directors voted unanimously to approve the ports authority’s request in a special meeting yesterday.
According to law, the CNMI government, its departments, autonomous agencies, municipalities, and public corporations may not incur any public debts without the consent of the CDA board of directors.
CDA’s approval would allow CPA to enter into negotiations with bond underwriters and bond counsels for assistance in the issuance of the revenue bonds.
CPA is planning to engage the services of Altura, Nelson & Company Inc. as bond underwriters; Orrick, Herrington & Sutcliffe as bond counsel; and Quaint & Thimming LLP as disclosure counsel.
Once CPA enters into a formal agreement with these companies, the agency will then have Fitch rating company perform a credit assessment and, based on the evaluation, issue the bonds.
The $7.18 million bonds will be used to finance the proposed improvements at the Port of Saipan container yard, which also includes the building of a drainage system approved by the U.S. Environmental Protection Agency.
CPA initially set a budget of $6 million, but later raised it by $1.8 million after finding that the amount would not be enough to fully finance the construction project, as well as interest and other processing fees.
Of the final $7.18 million budget, about $5.9 million will go to the actual construction.
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.
