The government is considering issuing $75 million to $80 million worth of nonrated bonds to raise cash to match Capital Improvement Projects funds, Commonwealth Development Authority Chairman Juan S. Tenorio said yesterday.<\/p>\n
He said the Revitalization Task Force, of which CDA is a member, made the decision in a last-ditch effort to source out an estimated $85 million in federal grants that have not been tapped since 1995.<\/p>\n
“Right now, we have no choice. It’s important to borrow money,” Tenorio said.<\/p>\n
Use of federal funds decreased greatly in the past three years out of a combination of the former governor’s reluctance to tap them and the lack of matching funds to draw them out.<\/p>\n
Unable to finance stalled public works, the government opts for a bond issue, Tenorio said.<\/p>\n
Tenorio said the task force has had consulted with at least four international bond underwriters \u2014 Morgan Stanley, Merrill Lynch, Ben Weaver and Academic Capital.<\/p>\n
They had recommended a nonrated bond as a way out of the crisis, he said.<\/p>\n
Nonrated bonds are not evaluated by rating agencies; they therefore are less attractive to buyers and carry higher interest rate because of their inherent risks.<\/p>\n
Tenorio said at current market condition a nonrated bond pays about 6.3 percent interest rate, whereas a bond rated AAA goes out for 5.1 percent.<\/p>\n
Based on that assumption, he said, the government would have to pay more than $7 million in interest in 25 years.<\/p>\n
A new CNMI law limits use of bond proceeds to funding government projects, matching CIP funds and paying back U.S. government loans.<\/p>\n","protected":false},"excerpt":{"rendered":"
The government is considering issuing $75 million to $80 million worth of nonrated bonds to raise cash to match Capital Improvement Projects funds, Commonwealth Development Authority Chairman Juan S. Tenorio said yesterday.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-44795","post","type-post","status-publish","format-standard","hentry","category-local-news"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/44795","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\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=44795"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/44795\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=44795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=44795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=44795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}