CCU proposes $210M loan
GPA plan includes upgrading facilities, equipment
By Dionesis Tamondong • Pacific Daily News
April 22, 2010
Power generation and distribution projects, a central office for Guam's power and water agencies, and investments into digital technology are among the things for which the Guam Power Authority plans to borrow about $210 million.
The Consolidated Commission on Utilities on Tuesday approved the power agency's plan to borrow up to $210 million for various improvement projects and refinancing efforts.
The bond financing needs the approval of the Legislature and the Public Utilities Commission. The loan would be paid back with future revenues collected from ratepayers.
The agency also has plans for another series of rate increases starting April 2011, according to a resolution the utilities commission passed Tuesday night.
CCU Chairman Simon Sanchez said a bulk of the borrowed money would go toward upgrading the agency's transmission and distribution facilities and equipment. If those facilities are able to run more efficiently, it will help lower the agency's operating costs, and in turn, delay or reduce future rate increases, Sanchez said.
The agency plans to invest in a $33.2 million Smart Grid Project, which has been estimated to produce up to $5 million per year in fuel savings, according to the CCU resolution. The agency received a $16 million federal grant for the digital technology project, but it must come up with the rest of the money.
A shared, central facility is also planned for the two utility agencies, which would called the Fadian Administration and Operations Center.
The building would help reduce costs for leasing and renovating existing facilities while streamlining operations for the two agencies, the resolution stated.
Showing posts with label Loans. Show all posts
Showing posts with label Loans. Show all posts
Thursday, April 22, 2010
Monday, December 15, 2008
Governor Optimistic About $20 Million Landfill Loan
Governor confident: Camacho upbeat on $20M landfill loan
By Dionesis Tamondong
Pacific Daily News
December 17, 2008
One local bank official said his bank is just not interested in lending the government $20 million for landfill construction. Another lender said it would consider the proposal if the repayment sources were more concrete.
With less than a week before the federal deadline for responses, the Camacho administration is sure some lending institutions will submit proposals to finance the Ordot dump closure and landfill construction projects.
"We remain confident that we will be able to secure the financing," said George Bamba, Gov. Felix Camacho's chief of staff. The government of Guam must deposit $20 million by Jan. 5, or some officials could face legal action from the federal government.
The Guam Economic Development and Commerce Authority has issued a request for proposals for financiers to lend GovGuam the money for the start-up projects.
BankPacific President Phil Flores said his bank won't respond to the financing request. "We're not interested. We're just not going to bid on this one."
While Flores didn't provide a specific reason for not responding to GovGuam's proposal, he said there's too much confusion over the dump situation.
"Is the Legislature wanting to build in Layon or to give the contract to (Guam Resource Recovery Partners)?" Flores asked. "So if you're lending money for a new landfill, there's always the concern that it's not going to be built."
Several lawmakers disagree with the local government's selection of Dandan, Inarajan, as the landfill site, arguing it is a potential freshwater source and is too remote for efficient use as a landfill. Senators passed a measure last month pushing for development of a privately operated landfill in the Guatali area of Piti and Santa Rita, on land being leased by GRRP, saying it is friendlier to the environment and less costly than floating bonds to develop the Inarajan site.
Pete Sgro Jr., co-counsel to Barclay's Capital, said his firm would be interested only if the repayment terms were solidified with Section 30 funds as collateral for the loan. Barclay's Capital is a division of Barclay's Bank, which has offices worldwide.
"We are seriously considering submitting a response, and if we do so, however, the response will contain terms that would include not continuing with a subordination of the Section 30 money," Sgro said. "Otherwise there is no value in the collateral."
Sgro said lawmakers made "damaging amendments" to the governor's original short-term borrowing bill.
The administration had pledged Section 30 money -- taxes paid by federal and military employees on Guam and remitted to GovGuam --to pay back the $20 million.
But lawmakers instead required tipping fees be used as the main repayment source, and a variety of funding sources -- including compact-impact money, Section 30 money and the General Fund -- as additional security, Sen. Ben Pangelinan said.
By doing so, Section 30 funds could continue to be used for other obligations, such as the overdue tax refunds and COLA payments.
"These payments are also ordered by the court and on par with the landfill issue," Pangelinan said.
Pangelinan said the amendments were made in consultation with the administration's fiscal policy team after lawmakers realized there wasn't enough support to pass the governor's original bill.
Sgro said lawmakers should go back and approve the original version of the governor's bill, which is in line with the intent of the federal receiver and the District Court of Guam.
"How can anyone ignore the consistent position taken by (Chief Judge Frances Tydingco-) Gatewood and create an amendment that will not accomplish the necessary financing because of the vagueness and lack of value of the collateral created by an amendment?" Sgro asked.
By Dionesis Tamondong
Pacific Daily News
December 17, 2008
One local bank official said his bank is just not interested in lending the government $20 million for landfill construction. Another lender said it would consider the proposal if the repayment sources were more concrete.
With less than a week before the federal deadline for responses, the Camacho administration is sure some lending institutions will submit proposals to finance the Ordot dump closure and landfill construction projects.
"We remain confident that we will be able to secure the financing," said George Bamba, Gov. Felix Camacho's chief of staff. The government of Guam must deposit $20 million by Jan. 5, or some officials could face legal action from the federal government.
The Guam Economic Development and Commerce Authority has issued a request for proposals for financiers to lend GovGuam the money for the start-up projects.
BankPacific President Phil Flores said his bank won't respond to the financing request. "We're not interested. We're just not going to bid on this one."
While Flores didn't provide a specific reason for not responding to GovGuam's proposal, he said there's too much confusion over the dump situation.
"Is the Legislature wanting to build in Layon or to give the contract to (Guam Resource Recovery Partners)?" Flores asked. "So if you're lending money for a new landfill, there's always the concern that it's not going to be built."
Several lawmakers disagree with the local government's selection of Dandan, Inarajan, as the landfill site, arguing it is a potential freshwater source and is too remote for efficient use as a landfill. Senators passed a measure last month pushing for development of a privately operated landfill in the Guatali area of Piti and Santa Rita, on land being leased by GRRP, saying it is friendlier to the environment and less costly than floating bonds to develop the Inarajan site.
Pete Sgro Jr., co-counsel to Barclay's Capital, said his firm would be interested only if the repayment terms were solidified with Section 30 funds as collateral for the loan. Barclay's Capital is a division of Barclay's Bank, which has offices worldwide.
"We are seriously considering submitting a response, and if we do so, however, the response will contain terms that would include not continuing with a subordination of the Section 30 money," Sgro said. "Otherwise there is no value in the collateral."
Sgro said lawmakers made "damaging amendments" to the governor's original short-term borrowing bill.
The administration had pledged Section 30 money -- taxes paid by federal and military employees on Guam and remitted to GovGuam --to pay back the $20 million.
But lawmakers instead required tipping fees be used as the main repayment source, and a variety of funding sources -- including compact-impact money, Section 30 money and the General Fund -- as additional security, Sen. Ben Pangelinan said.
By doing so, Section 30 funds could continue to be used for other obligations, such as the overdue tax refunds and COLA payments.
"These payments are also ordered by the court and on par with the landfill issue," Pangelinan said.
Pangelinan said the amendments were made in consultation with the administration's fiscal policy team after lawmakers realized there wasn't enough support to pass the governor's original bill.
Sgro said lawmakers should go back and approve the original version of the governor's bill, which is in line with the intent of the federal receiver and the District Court of Guam.
"How can anyone ignore the consistent position taken by (Chief Judge Frances Tydingco-) Gatewood and create an amendment that will not accomplish the necessary financing because of the vagueness and lack of value of the collateral created by an amendment?" Sgro asked.
Sunday, November 09, 2008
GovGuam Bonds Upgraded to B +
GovGuam bond upgraded to B+
By Sabrina Salas Matanane
Published Oct 29, 2008
KUAM NEWS
Ratings authority Standard & Poor's has upgraded the Government of Guam's General Obligation bonds to "B+" from "B". The upgrade follows a recent trip by Guam Economic Development and Commerce Administrator Tony Blaz, governor's chief of staff George Bamba, and Bureau of Budget Management & Research director Bertha Duenas, who met with the company two weeks ago.
During that meeting the governor's financial team highlighted "the projected growth of Guam's economy including the imminent military buildup and tourism diversification efforts with regards to the China Visa Waiver Program," stated Blaz. According to a report issued by S&P, "The upgrade is based on the general government's improved financial performance, which is the direct result of greater political consensus to enhance revenues and control expenditure growth."
The report went on to state that it was also based on the general government more fully addressing the unfunded long-term liabilities on Guam's balance sheet. "This is excellent news, which speaks to this Administration's serious commitment to stronger finances," Governor Felix Camacho said. "When I came to office in 2003, I promised to improve the government's finances and take us up the road to fiscal recovery. I'm proud we're accomplishing this for the benefit of the generations that come after ours. "
"There is a long road ahead and we're going to keep working to eliminate the deficit, pay our people what they are owed and strengthen the government's financial position further," he added.
By Sabrina Salas Matanane
Published Oct 29, 2008
KUAM NEWS
Ratings authority Standard & Poor's has upgraded the Government of Guam's General Obligation bonds to "B+" from "B". The upgrade follows a recent trip by Guam Economic Development and Commerce Administrator Tony Blaz, governor's chief of staff George Bamba, and Bureau of Budget Management & Research director Bertha Duenas, who met with the company two weeks ago.
During that meeting the governor's financial team highlighted "the projected growth of Guam's economy including the imminent military buildup and tourism diversification efforts with regards to the China Visa Waiver Program," stated Blaz. According to a report issued by S&P, "The upgrade is based on the general government's improved financial performance, which is the direct result of greater political consensus to enhance revenues and control expenditure growth."
The report went on to state that it was also based on the general government more fully addressing the unfunded long-term liabilities on Guam's balance sheet. "This is excellent news, which speaks to this Administration's serious commitment to stronger finances," Governor Felix Camacho said. "When I came to office in 2003, I promised to improve the government's finances and take us up the road to fiscal recovery. I'm proud we're accomplishing this for the benefit of the generations that come after ours. "
"There is a long road ahead and we're going to keep working to eliminate the deficit, pay our people what they are owed and strengthen the government's financial position further," he added.
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