VIPA OKs bond borrowing for capital projects
Published: May 10, 2014
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ST. THOMAS - The V.I. Port Authority board approved going to the bond market Friday to refinance existing debt and borrow for capital projects.
The board selected Jefferies LLC as the investment bank and underwriter for the $50 million financing package.
Chief Financial Officer Valdamier Collens said the Port Authority's financial adviser, bond counsel and an internal evaluation committee reviewed five proposals.
Collens told the board that the Port Authority has about $25 million in existing bond debt that will be refinanced. With the low interest rates currently available on the bond market, Collens said the Port Authority expects to save $1 million to $1.8 million by refinancing the debt.
Additionally, $25 million in new debt will be floated to fund capital projects, according to Collens.
The bond will be backed by marine revenues.
In February, the board authorized staff to secure a $132.6 million in financing to support a new five-year capital project plan. The $50 million bond will be one part of that larger plan and allow the Port Authority to begin to fund some of the capital projects on the slate, including several dredging projects.
The capital budget is separate from the Port Authority's annual operating budget, and financing typically is drawn from one-time sources, such as grants and loans.
Approximately every five years, the Port Authority comes up with a capital improvement plan. The next plan will cover years 2015 to 2019 and includes 64 projects.
The new projects include airport runway rehabilitation, other airport improvements, dredging, dock improvements, building maintenance, new construction, new equipment and security infrastructure.
The board also selected AON Risk Solutions of Puerto Rico to be the Port Authority's insurance broker for the next three years at a cost of $250,000 per year.
Members at Friday's special meeting were Roberto Cintron, Tourism Commissioner Beverly Nicholson-Doty, Robert O'Connor Jr., Allison Petrus, Public Works Commissioner Darryl Smalls and Yvonne Thraen.
Members Manuel Gutierrez Jr., Labor Commissioner Albert Bryan Jr. and V.I. Attorney General Vincent Frazer were absent Friday.
- Contact reporter Aldeth Lewin at 714-9111 or email email@example.com.