Bond sells, refunds/COLA coming in December - KUAM.com-KUAM News: On Air. Online. On Demand.

Bond sells, refunds/COLA coming in December

by Ken Quintanilla

Guam - Just as it had anticipated, the Calvo Administration and its fiscal team successfully sold tax refund bonds this morning at a record-low rate, which will bring significant savings to the tune of tens of millions of dollars.  And residents are making their Christmas lists as refund checks are due out the first week of December.

"Now is the perfect time for people to get money and everybody needs money for Christmas and Thanksgiving to celebrate with their families," he said. Agana Heights resident Chris Guerrero was ecstatic to hear that $235 million in tax refunds bonds were sold on Wall Street today. In this tough economy, Guerrero says his $700 tax refund will come in handy.

Despite skepticism from some in the Guam Legislature how was the Administration able to pull this off? "So we had a game plan, we stuck to it, we understood that there had to be certain accommodations because of he legislative process, but we still stuck to the game plan and the timing was perfect," said Governor Eddie Calvo. While his fiscal team remains in New York, the governor says the competition for the bonds was so well received that the final interest cost came in at 4.94% - a record-low.

"At that interest rate, as pegged against Guam's history on interest rates and what was originally envisioned by members of the Legislature. We're looking at between $60 million and $70 million in debt service savings," he shared. Calvo says the lower interest rate will be paid to the lending institutions as opposed to the taxpayers of Guam. And although his original plan was to put one up front bond indenture at a 100% of the appraised value of Guam real estate, Calvo will now move forward with the second series of bonds to pay for the remaining tax refunds.

"We are now hopeful that based on the provisions of the law that we can move forward in getting the Deficit Elimination Commission together and looking at the issues that are current in regards to the mandates of that legislation, so we can move forward in a Series-B bond to pay for those obligations that were originally intended in the legislation that we had presented to the Legislature," Calvo said.

He adds some changes will need to be made to the legislation. He's optimistic though that the second series will just as well as today's.

For Dededo resident Joseph Torres, the news couldn't come at a better time, as his bills have been piling up. "Especially with how much they pull out of our paychecks every payroll. I am struggling and not to get our tax refunds right away it's kind of, and it's very irritating and it makes people angry," he told KUAM News.

"But I would like to get the stress off."

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