{"id":23350,"date":"2012-07-06T07:22:54","date_gmt":"2012-07-06T07:22:54","guid":{"rendered":"http:\/\/newspaper.ctsi-logistics.com\/?p=23350"},"modified":"2012-07-06T07:22:54","modified_gmt":"2012-07-06T07:22:54","slug":"nmi-may-have-dodged-a-bond-rating-downgrade","status":"publish","type":"post","link":"https:\/\/www.saipantribune.com\/index.php\/nmi-may-have-dodged-a-bond-rating-downgrade\/","title":{"rendered":"NMI may have dodged a bond rating downgrade"},"content":{"rendered":"
The CNMI’s B2 bond rating for its Series 2003A General Obligation Bonds may have just dodged a downgrade, as the Fitial administration said it provided the CNMI government’s 2010 single audit report, which was the only information that Moody’s Investors Service required for submission.<\/span><\/div>\n

Moody’s Investors Service announced on May 4 that it placed the bond rating under review and required the CNMI to provide sufficient current financial and operating information within 60 days. That 60-day period lapsed this week.<\/p>\n

Gov. Benigno R. Fitial said Wednesday that if there was a downgrade he would know about it, but deferred questions about the bond rating review to Lt. Gov. Eloy S. Inos.<\/p>\n

Press secretary Angel Demapan said yesterday that there has not been any advisory that a downgrade occurred or that it was averted.<\/p>\n

He said the single audit report was issued right around the same time that the Moody’s announcement came out.<\/p>\n

\u201cHence, the release of the single audit would provide the information that was considered lacking,\u201d Demapan told Saipan Tribune.<\/p>\n

That audit report, conducted by Deloitte under contract with the Office of the Public Auditor, said the CNMI government’s unreserved fund deficit ballooned by $36.1 million or 12 percent in a 12-month period, bringing the total to $336.9 million by the end of fiscal year 2010 compared to $300.8 million in fiscal year 2009.<\/p>\n

The unreserved fund deficit of $336.9 million in fiscal year 2010 is much more than the government’s fiscal year 2012 budget of $102 million.<\/p>\n

Moody’s said on May 4 that the placement of the rating on review \u201cis prompted by the lack of sufficient current financial and operating information.\u201d<\/p>\n

\u201cIf the information is not obtained within the next 60 days, we will take appropriate rating action, which could include the withdrawal or lowering of the rating,\u201d Moody’s said.<\/p>\n

Inos said at the time that the administration has done \u201ccorrective actions\u201d to avoid a downgrade.<\/p>\n

A downgrade of the CNMI’s bond rating would mean that the Commonwealth would find it more difficult to issue bonds, such as a pension obligation bond that the Fitial administration and some lawmakers have been advocating to help pay for the government’s outstanding employer contributions to the NMI Retirement Fund, now at over $320 million.<\/p>\n

Demapan said the CNMI, by way of its voters, may approve a pension obligation initiative.<\/p>\n

\u201cHowever, the initiative would only pave the way for the government to pursue a bond; it does not guarantee that such a bond would be approved. That would be something that would be determined when we get to that point,\u201d he added.<\/p>\n

Oscar Camacho, loan manager at the Commonwealth Development Authority, said yesterday he believes that the bond rating that Moody’s has reviewed may have been the CNMI’s $40 million bond in 2003 for land compensation claims and was refunded in 2007.<\/p>\n

\u201cAny downgrade would be hurtful. So we really need to be forthcoming in our reporting requirements,\u201d he said.<\/p>\n

Inos had said the issue of bond rating review is more about turning the economy around.<\/p>\n

Demapan also said the review of the CNMI’s B2 bond rating was something expected given the recent publicity brought about by the Chapter 11 bankruptcy petition filed by the Fund.<\/p>\n

The Fund was the first public pension agency on American soil to seek bankruptcy protection, but a federal judge later said he will dismiss it.<\/p>\n","protected":false},"excerpt":{"rendered":"

The CNMI’s B2 bond rating for its Series 2003A General Obligation Bonds may have just…<\/p>\n","protected":false},"author":35,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[33,20,26,38],"class_list":["post-23350","post","type-post","status-publish","format-standard","hentry","category-local-news","tag-angel-demapan","tag-budget","tag-cnmi","tag-saipan-tribune"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/23350","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=23350"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/23350\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=23350"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=23350"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=23350"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}